عوامل تعیین کننده چسبندگی دستمزد در یک اقتصاد در حال توسعه

We explore wage flexibility in a developing country and compare our results to what has been found in similar studies using European data. In particular, we conduct a survey of 1189 firms in Pakistan to analyze the determinants of wage rigidity. We find that the existence of competitive wages and an interaction with the informal economy are statistically significant determinants of wage stickiness. While the role of competitive wages is similar to what has been found in studies of European firms, the latter find a much larger role for turnover, collective bargaining and employment protection. In contrast, in Pakistan we find that firms hiring from the informal sector are significantly more flexible in changing their wages. This suggests that the informal sector adds to the wage flexibility of the formal sector.

The objective of this paper is to study wage rigidity in Pakistan. Pakistan differs from the more developed countries where similar studies have been performed in that the system of unemployment benefits is absent, labor unions are very weak, a modern welfare state is non-exisistent, there is a large underground economy and poverty is widespread. It shares with many European countries the existence of significant firing costs, in particular in the public sector. We report the results of 1189 face-to-face structured interviews carried out in 2009 to 2011 with managers in formal firms in the manufacturing and service sectors of Pakistan.1 Only regular employees are included making our results comparable to similar research done in the developed countries. We start by reviewing the literature and then turn to describing our survey before describing our results on wage setting, the frequency of wage adjustements, wage setting rules and the determinants of wage flexibility.

To sum up, in this paper we find novel results on wage determination in a developing economy. We have learned that wages are rigid in Pakistan but less so than found in comparable surveys in the European economies. Moreover, nominal wages in the manufacturing sector are less rigid than in the services sector. When wages do change, they do so at a 12 month time interval and on a set date typically at the start of the financial (January) or the fiscal year (June). We find that 35 and 45% of wage revisions take place at the beginning of the financial and the fiscal year respectively and that 83% of wage changes are reported to take place in any given month. These results suggest that there is some concentration in wage revisions but at economy-wide level wages are not synchronized. A similar pattern is found in European surveys where however only 54% of managers admit wages change in a given month.