Date & time
As a key determinant of household welfare, workers’ real wages matter. Limited by small and infrequent surveys, the study of real wages in Papua New Guinea (PNG) has until now been constrained by a paucity of data. Using a novel dataset, we construct the first longitudinal series of wages for (to a close approximation) the population of formal private sector workers in PNG for a 20-year period, spanning three decades from 1999 to 2018. This allows us to examine real wage growth for the formal private sector in PNG over this period using a panel regression. Among the main findings are that conditional real wage growth over the sample period (controlling for worker fixed effect and experience and industry concentration) has averaged about 4.5 percent. Also, real wage developments closely mirror the bust-boom-bust episodes of the macroeconomic cycle. Further, conditional real wage growth in the agricultural sector has lagged behind the services, industry, and mining sectors with agriculture hardest hit during busts and lagging during the boom and mining the winner. Finally, men experience higher conditional real wage growth during the boom but also bear the brunt of the decrease during times of bust.
Dr Martin Davies
Associate Professor of Economics, Washington and Lee University, and Visiting Fellow, Development Policy Centre, Australian National University
Professor Niels-Hugo Blunch
Economics, Washington and Lee University