Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/318140 
Year of Publication: 
2015
Series/Report no.: 
BCAM Working Paper No. 1504
Publisher: 
Birkbeck, University of London, Birkbeck Centre for Applied Macroeconomics (BCAM), London
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.
Subjects: 
Informal sector
wage setting
wage rigidity
JEL: 
E24
E26
J31
J46
Document Type: 
Working Paper

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