Stick Wages in a Developing Country: Lessons from Structured Interviews in Pakistan (original) (raw)
Related papers
2013
We contribute to the growing literature on the empirical evidence for wage rigidity using structured interviews for Pakistan. The novelty of the study consists of using data from a developing country which provides the basis for a comparison with studies performed in the developed countries. Our sample of 1189 managers finds widespread support for downward nominal wage rigidity while real wage rigidity is less pronounced although still present. Concerns about the adverse effects of wage reductions on effort, morale, the most productive workers leaving (adverse selection) and the minimum-wage largely explain the presence of nominal wage rigidity. All sectors, irrespective of time, take minimum-wage changes into account when setting wages so that the law very much sets wage expectations.
Wage Setting Behaviour of Firms in Industrial Estates of Khyber Pakhtunkhwa, Pakistan
Review of Applied Management and Social Sciences, 2020
The objective of the study is to analyze the wage setting behaviour of firms. For this study four major industrial estates of Khyber Pakhtunkhwa. Using stratified random sampling, data is collected from 342 firms. Multinomial logistic model is used to estimate the effects of determinants on wage change. Most of the firms change wage rate once in a year. Majority of the firms follow time-dependent wage policy. Half of the firms, which are following time-dependent wage policy, change the wage rate at the end or start of the fiscal year. Most of the firms are not found to index wages. Moreover, the percentage of firms not involved in wage indexation is higher for daily workers than for permanent worker. Labor productivity, employment level in the economy, government regulations, taxes, demand for the product, and inflation are important factors of wage change, but the most important factor is the labour productivity and least important is pressure from the labour union. Imperfect compe...
Efficiency Wage Hypothesis—The Case of Pakistan [with Comments]
2005
The object of this paper is to present an exposition of Efficiency Wage theory, and to test its basic assertions in the context of Pakistan. The Great Depression of 1929 showed that labour disequilibrium persists for long periods of time. One of the causes of this was rigidity of nominal wages, which was assumed without explanation by Keynes in his General Theory. Stagflation in the 1970s led to re-examination of Keynesian theories and a search for a satisfactory theoretical explanation of wage rigidity.
Disparity in the Structure of Wages in Pakistan
Perpetual Disparities in all norms of lives are one of those essences of Pakistan which have been like a ghost that always exploits to its victims. This paper investigates and identifies the Disparities in the wage Structure of Pakistan. Data for the wages from 9 different sectors which includes Mining and Quarrying, Manufacturing, Electric Gas and Water, Construction, Whole and Retail Trade, Transportation, Financial Real Estate have been taken from Labor force survey for 2000- 2010, which is available at State Bank and Economic Survey of Pakistan. The main objective/ proposition of this study is to compare the wages of the outlined sectors with the wage structure of agriculture sector. The Split technique for means has been deployed to interrogate the data and the propositions of this research. It is revealed in this paper that wages of all the selected sectors are at higher side as compared to the agriculture sector of Pakistan, and despite of the claim that Pakistan is an agririan country, the agriculture sector has been ignored in terms of wages offered to the employees work for it.