Wage disparities between high and low wage cities with and without the cost of living within Punjab and Sindh: An application of Oaxaca-Blinder using PSLM with HIES

Authors

  • Farrukh Mahmood Muhammad Ali Jinnah University
  • Shumaila Hashim Applied Economics Research Centre (AERC), University of Karachi, Karachi, Pakistan
  • Uzma Iram Assistant Professor at Applied Economics Research Centre (AERC), University of Karachi, Karachi, Pakistan
  • Muhammad Zubair Chishti Quaid-e-Azam University, Islamabad, Pakistan

DOI:

https://doi.org/10.34260/jaebs.441

Keywords:

Wage Disparity, Cost of Living, Micro Data, Oaxaca-Blinder

Abstract

Wage disparities research hardly incorporate for the cost of living differences due to data restriction, while the wage disparity issue is the crucial area of economist interest. The study aims to examine the wage disparities between high and low wage cities for Punjab and Sindh province of Pakistan with and without the cost of living, deploying the data of Pakistan Social and Living Standards Measurement Survey (PSLM) with Household Integrated Economic Survey (HIES) for 2005, 2007, 2010, and 2013. Applying the Oaxaca-Blinder estimation method, the findings infer that wage dispersion is high without the cost of living model for both provinces (Punjab and Sindh) as compared to with cost of the living model. Moreover, the results reveal that the wage dispersion is greater in Punjab province than Sindh province. For policymakers, our study suggests that the cost of living is an essential component of the wage dispersion in Pakistan’s cities; it should be considered while formulating for wage policy.

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Published

2020-12-31

How to Cite

Mahmood, F., Hashim, S. ., Iram, U. ., & Chishti, M. Z. . (2020). Wage disparities between high and low wage cities with and without the cost of living within Punjab and Sindh: An application of Oaxaca-Blinder using PSLM with HIES. Journal of Applied Economics and Business Studies, 4(4), 1-14. https://doi.org/10.34260/jaebs.441