Do Private Schools Produce More Productive Workers?

Education has positive links with economic development as it raises the productivity of the work force. Beside private rates of returns, the social returns of education are also high. Because of the gains to society, education is subsidised in many countries. Pakistan, where only 2.5 percent of the GDP is spent on education, provides subsidised education in the form of a public school system.1 Government pays for the major expenditures such as construction of infrastructure for education and salaries to the teaching and related staff. Household cost is kept low to attract more people to send their children to schools. Therefore only a nominal tuition fee is being charged for attending these schools. From the social point of view these schools are doing a good job in achieving the goal of universal education. But quality of education is a serious problem with this school system. In the majority of the cases, these are crowded with students and most of the time without adequate number of teaching staff.2 The standards set for the employment of teaching staff are not properly observed in the presence of a low literacy in the country.

An Analysis of Occupational Choice in Pakistan: A Multinomial Approach

Occupational choice plays an important role in determining earnings and success in the labour market. In the social structure of Pakistan, an occupation reflects the socio-economic status of the individual. In this backdrop, the paper looks at the occupational structure and analyses how different characteristics help individuals to access jobs of their choice. The main issue discussed in the paper is how men and women have a different occupation distribution. Estimates are based on a multinomial log model of occupation choices for men and women, using the Pakistan Integrated Household Survey (PIHS) 2001-02 data. The empirical results show that individuals with high educational achievements choose high-ranking jobs. It is also noted that gender has a role in the labour market and males are sorted out in high-paying occupation. Occupational choice is influenced more by the human capital variables than by the individual characteristics. Among human capital variables, education has the strongest impact in the selection of an occupation of choice.

Returns to Human Capital in Pakistan: A Gender Disaggregated Analysis

The impact of human capital variables on the earnings of regular wage employees is explored in this paper. Besides education and experience, literacy index, technical training, and school quality are included in the earning functions estimated for individuals. The credentialist view that education does not improve productivity—that it rather provides positive signals about productivity—is also tested. The results are based on the Pakistan Integrated Household Survey 1995-96 data, which provides information on many aspects of the individual’s characteristics missing in other surveys. The results of the study provide ample evidence in favour of human capital as a productivity-enhancing device for both male and female workers. All human capital variables are found to be statistically significant, having positive magnitude. The diploma effect is not very important for Pakistani workers, as only a few diploma dummies are statistically significant.

Earnings Differential between Public and Private Sectors in Pakistan

The paper explores the earnings differential between public and private sectors in Pakistan. The private sector is further divided into formal and informal sectors for comparison purposes. It utilises an expanded version of the human capital model to determine important determinants of earnings in each sector. Using standard technique, the earnings are decomposed into two parts, i.e., differential due to personal characteristics and due to earnings structure of the particular sector. The Labour Force Survey 1996-97 is used for the analysis of wage differential. Results indicate that workers in public sector earn more than both private formal as well as informal sector workers. These earnings are higher due to their superior personal human capital endowment; however, the wage structure of the public sector is not helping them. The informal sector workers are earning lower than both public sector and private formal sector workers due to both personal characteristics and wage structure of the informal sector.

Determinants of Personal Earnings in Pakistan: Findings from the Labour Force Survey 1993-94

The paper explores the role of human and non-human capital factors in determining the earnings of workers in Pakistan. The Labour Force Survey data 1993-94, which provides detailed information about workers, has been used for this analysis. Ordinary least squares estimation technique has been utilised for the analysis. The analysis is carried out separately for male and female workers. It is found that in human capital variables, education plays a dominant role in wage determination. In non-human capital factors, occupation and size of the establishments are found to be relevant variables. Other important variables include regional location and technical training. The sample selection bias has been observed for female workers whereas no problem has been observed for male workers, and the bias has been corrected by using the Heckman procedure, though both corrected and uncorrected results are reported. Important conclusions and policy implications are discussed at the end.

Pension and Social Security Schemes in Pakistan: Some Policy Options

An examination of the public pension and social security schemes in Pakistan reveals that the provision of regular pensions is limited to formal sector employees only. A number of social security schemes that are operational in the public and private sectors cover a small proportion of old-age population, whereas a significant proportion of the elderly population working in the informal sector remains largely unprotected by social security schemes. As such, the challenge of meeting the needs of the increasing elderly population demands an improvement of the support base and social security system in Pakistan that emphasises the need to implement reforms of public pensions and programmes of social protection. Efficient deployment of resources and improvement of the governance structure are needed for effective welfare of the eligible sub-group of the elderly and the economically disadvantaged population.Social Security, Pensions, Pakistan