Informal Labour Markets in Pakistan

Ali Choudhary, Saima Mahmood and Gylfi Zoega
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Saima Mahmood: University of Iceland
Authors registered in the RePEc Author Service: Saima Naeem

No 1504, BCAM Working Papers from Birkbeck Centre for Applied Macroeconomics

Abstract: This paper describes the results of a survey of informal-sector firms in Pakistan. Firms belong to the informal sector mainly because of scarce financial resources. There are significant differences in the level of wages and the flexibility of wages with the informal sector having both lower wages and greater flexibility than the formal sector. While minimum wages are less binding in the informal sector, indexation of wages to inflation is more common. In spite of these differences the reasons for not cutting wages in a recession are similar between the two sectors.

Keywords: Informal sector; wage setting; wage rigidity. (search for similar items in EconPapers)
JEL-codes: E24 E26 J31 J46 (search for similar items in EconPapers)
Date: 2015-09
New Economics Papers: this item is included in nep-iue and nep-mac
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https://eprints.bbk.ac.uk/26637/1/26637.pdf First version, 2015 (application/pdf)

Related works:
Working Paper: Informal Labour Markets in Pakistan (2016)
Working Paper: Informal Labour Markets in Pakistan (2016)
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