Employment Preferences and Length of Job Queues in Pakistan

Abstract

It has long been recognised that public sector jobs are an attractive opportunity (because of job security, fringe benefits, and so on) in Pakistan's labour market. Since the early 1990s, Pakistan has been going through an economic restructuring plan, particularly in terms of privatisation. The aim of this paper is to examine the change in the phenomenon of ‘wait unemployment’ created due to preference for public sector jobs, using cross-section labour force surveys for 2001–02, 2003–04 and 2005–06. This hypothesis has been examined earlier only for 2001–02 (Hyder 2007). The evidence supported the view that unemployed people in Pakistan prefer public sector jobs, and due to this preference they remain unemployed for a particular period of time. However, the duration is uncompleted in nature. This study will provide an update on changing trends in job preferences among unemployed individuals based on two more recent nationwide Labour Force Surveys, for 2003–04 and 2005–06.

Keywords

Wage Differentials Wage Structure Unemployment Models Duration and Job Search JEL Classification: J31,J64

Get full access to this article

View all access options for this article.

References

Abowd, J.M. and H.S. Farber (1982), ‘ Job Queues and Union Status of Workers ’, Industrial and Labour Relations Review, 35(3): 354–67 .

Bilquees, Faiz (2006), ‘ Civil Servants ’ Salary Structure’. Working Papers Series 4, Pakistan Institute of Development Economics.

Gregory, R.G. and J. Borland (1999), ‘Recent Developments in Public Sector Labour Markets’, in O. Ashenfelter and D. Card (eds), Handbook of Labour Economics Volume 3C. The Netherlands: Elsevier Science B.V .

Gupta, S. , C. Schiller and H. Ma (1999), ‘ Privatization, Social Impact, and Social Safety Nets ’. IMF Working Paper WP/99/69. Washington DC: IMF.

Heckman, J. (1979), ‘ Sample Selection Bias as a Specification Error ’, Econometrica, 47(1): 153–62 .

Hyder, A. (2002), ‘ Public-Private Wage Differentials in Pakistan ’, Bangladesh Development Studies, 28(4): 79–93 .

Hyder, A. and B. Reilly (2005), ‘ The Public Sector Pay Gap in Pakistan: A Quantile Regression Analysis ’, Working Paper No. 33, Poverty Research Unit, Department of Economics, University of Sussex, July.

Hyder, A. (2007a), ‘ Preferences for Public Sector Jobs and Wait Unemployment: A Micro-Data Analysis ’, PIDE Working Paper 2007: 20, Pakistan Institute of Development Economics, Islamabad.

Hyder, A. (2007b), ‘Public–Private Sector Earning Differentials and Preferences for Public Sector Jobs: A Empirical Analysis Using Micro Data from the Labour Force Survey 2001–02’. Ph.D. dissertation, NUST Institute of Management Sciences, Rawalpindi .

10.

Khan, I.A. (2003), ‘ Impact of Privatization on Employment and Output in Pakistan ’, The Pakistan Development Review, 42(4): 513–36 .

11.

Mengistae, T. (1999), ‘ Wage Rates and Job Queues: Does the Public Sector Overpay in Ethiopia? ’ Policy Research Working Paper No. 2105, The World Bank Development Research Group, Washington, D.C.

12.

Nasir, Z.M. (2000), ‘ Earnings Differential between Public and Private Sectors in Pakistan ’, The Pakistan Development Review, 39(2): 111–30 .

13.

Nasir, Z.M. (1998), ‘ Determinants of Personal Earnings in Pakistan: Findings from the Labour Force Survey 1993–94 ’, Pakistan Development Review, 37(3).

14.

Poirier, D. (1980), ‘ Partial Observability in Bivariate Probit Models ’, Journal of Econometrics, 12(suppl.), 209–17 .

15.

Privatization Commission Pakistan (2005), Annual Report 2005.

16.

Stewart, M. (1983), ‘ On Least Square Estimation when the Dependent Variable is Grouped ’, Review of Economic Studies, 50: 737–53 .

17.

Yasmeen, B. (2007), ‘The Labour Market Outcomes of Trade Liberalization in Pakistan’, Ph.D. dissertation (unpublished), Economics Department, Quaid-i-Azam University, Islamabad.