Wage differentials in Sri Lanka: the case of a post-conflict country with a free education policy
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.

Online publication date: Tue, 05-Apr-2016

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