Abstract:
The wage in labor market has drastically
changed during the past centuryand gone through
different stages and changed with socioeconomic
determinants. Among the concepts of labor, demand
and supply of labor are very important in practical
sense. The determination of wages in a free market
simply depends on the socioeconomic characteristics
of the labor force. Therefore, an attempt is made to
explore the relationships between the wage rates and
demographic characteristics of labor force using
econometric methods.
The required data are obtained from the records
of Labor Force and Socioeconomic Survey conducted
by the Department of Census and Statistics. An
econometric model for wage rates using the
demographic characteristics as independent variables
is fitted and verified. The study reveals that age, gender,
civil status, ethnicity etc. have significant influences in
determining the wages. Hence, it is emphasized that
the demographic characteristics should be taken into
consideration whendetermining the wages of
aparticular labor force inherited in the respective areas
of the country.
This study specifically reports that the general
effect of hourly wage rate in Sri Lanka is 2.566 when
ignoring the socio-demographic characteristics of
labor force and the average hourly wage rate difference
by gender is 0.294 and difference by marital status is
0.162. Further, the average hourly wage rate differences
in the three ethnic groups Sinhalese, Sri Lankan Tamil,
and Indian Tamil were individually found to be 0.034,
0.008, and 0.352 discriminated from rest of the ethnic
groups. Similar hourly wage rate differences for
employees of the Government sector and Semigovernment
sector were found to be 0.28.and 0.19. The
effects or differences in hourly wage rates due to
educational levels and literacy rates of the employees
in Sri Lankan labor market are also reported in this
study.
