Wages, Employment and Trade Unions in Pakistan

In this paper, an attempt has been made to analyse the industrial workers wages, in large-scale manufacturing, in the context of interaction between institutional and non-institutional forces. The growth in the real wages of industrial workers, unionization and employment are explained in the framework of a simultaneous-equation estimation. The study finds that Pakistan’s data are suggestive of an interdependence between the real wage gains and the extent of unionization. Trade unions exert an upward pressure on wages but rising wages in turn facilitate unionization.