Inter-industry wage differentials in Pakistan

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An analysis of Inter-industry wage differentials is essential, in order to assess the effect of corporate culture and centralisation/decentralisation on the different industries and labour markets. This paper examines the magnitude of inter-industry wage differentials in Pakistan, using data drawn from the Labour Force Surveys during the period between 1990-91 and 2003-04. The results show a significant variation in relative wages according to industry status, even after controlling for a range of human capital and job characteristics in the pooled sample as well as in the pseudo panel data analysis. Additional analysis has been undertaken for different regions, area of living and working sector for one as well as two digit industries We have also looked at the estimation for each cross-section, to view the wage differentials trend during the period of fourteen years which shows a significant increase in the wage differentials. The dispersion of wages across industries, controlling for observed human capital and job characteristics, is quite high in Pakistan, compared to other countries. The dispersion has increased during the sample period from 0.0598 (6%) in 1990-91 to 0.0822 (8.2%) in 2003-04.
Original languageEnglish
Publication statusPublished - Dec 2006
Event22nd AGM and Conference of the Pakistan Society of Development Economists - Lahore, Pakistan
Duration: 19 Dec 200622 Dec 2006


Conference22nd AGM and Conference of the Pakistan Society of Development Economists


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