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Schooling is Associated Not Only with Long-Run Wages, but Also with Wage Risks and Disability Risks: The Pakistani Experience

23 Pages Posted: 23 May 2011  

Asma Hyder

Institute of Business Administration

Jere Behrman

University of Pennsylvania - Department of Economics

Date Written: May 9, 2011

Abstract

Many studies document significantly positive associations between schooling attainment and wages in developing countries. But when individuals enter occupations subsequent to completing their schooling, they not only face an expected work-life path of wages, but a number of other occupational characteristics, including wage risks and disability risks, for which there may be compensating wage differentials. This study examines the relations between schooling on one hand and mean wages and these two types of risks on the other hand, based on 77,685 individuals from the wage-earning population as recorded in six Labor Force Surveys of Pakistan. The results suggest that schooling is positively associated with mean total wages and wage rates, but has different associations with these two types of risks: Disability risks decline as schooling increases but wage risks, and even more, wage rate risks increase as schooling increases. The schooling-wage risks relation, but not the schooling-disability risks relation, is consistent with there being compensating differentials.

Keywords: Wages, Risks, Labor Markets, Job Disabilities, Compensating Differentials, Developing Country, Schooling

JEL Classification: J31, J28, O53

Suggested Citation

Hyder, Asma and Behrman, Jere, Schooling is Associated Not Only with Long-Run Wages, but Also with Wage Risks and Disability Risks: The Pakistani Experience (May 9, 2011). PIER Working Paper No. 11-013. Available at SSRN: https://ssrn.com/abstract=1847980 or http://dx.doi.org/10.2139/ssrn.1847980

Asma Hyder

Institute of Business Administration ( email )

Karachi University, Campus
Karachi
Pakistan

Jere R. Behrman (Contact Author)

University of Pennsylvania - Department of Economics ( email )

160 McNeil Building
3718 Locust Walk
Philadelphia, PA 19104
United States
215-898-7704 (Phone)
215-573-2057 (Fax)

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