Determinants of Wages in an Emerging Economy: A Case of Bhutan

Abstract

This paper aims to examine the factors influencing wages in Bhutan, utilizing the Mincerian earnings framework with pooled regression models. The study uses six waves of Bhutan’s labor force survey data spanning from 2010 to 2015, which was collected by Ministry of Industry, Commerce and Employment. The findings underscore the significance of educational level and work experience in determining wages in Bhutan. Specifically, each additional year of education corresponds to a roughly 9% increase in hourly real wages, while each extra year of work experience results in approximately a 5% rise. Additionally, factors such as gender, area, and marital status emerge as a significant determinant of wages alongside education and work experience in Bhutan