Wage Differentials in Sri Lanka: The case of a post-conflict country with a free education policy

Kumara, Ajantha Sisira (2015): Wage Differentials in Sri Lanka: The case of a post-conflict country with a free education policy.

Abstract

This study analyses wage differentials in Sri Lanka by the individuals’ educational attainment. The wage returns to education are estimated by using a combination of the techniques of ordinary least-square, two-stage least-square, sample-selection, and quantile regression on micro-data of the Sri Lanka Labour Force Survey-2013. Therefore, the estimates provided by this study are representative of the entire country and corrected for both the endogeniety and the sample-selection biases. The study concludes that education generates a positive impact on private earning. The results show that one additional year of schooling increases hourly wage rate by 9% approximately. Also, according to the results, the primary and secondary education reduces income inequality among people whereas the bachelor’s-degree University education is a contributor to the income inequality. Further, the results relating to the additional controls reveal that the male, urban, and the public sector employees earn relatively higher wage returns.

• Item Type: MPRA Paper
• Language: English
• Keywords: Education; Equality; Household surveys; Instrumental variables; Micro-data; Quantile Regression; Returns; Sample-selection; Sri Lanka; Wage rates
• Subjects: I - Health, Education, and Welfare > I0 - General; I - Health, Education, and Welfare > I2 - Education and Research Institutions > I24 - Education and Inequality; I - Health, Education, and Welfare > I2 - Education and Research Institutions > I26 - Returns to Education

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