Wage differentials in Sri Lanka: the case of a post-conflict country with a free education policy Online publication date: Tue, 05-Apr-2016
by Ajantha Sisira Kumara
International Journal of Education Economics and Development (IJEED), Vol. 6, No. 4, 2015
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 the hourly wage rate by 9% approximately. In addition, according to the results, primary and secondary education reduces income inequality among people whereas the bachelor's-degree university education contributes to 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.
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