A STUDY OF INTERINDUSTRY WAGE DIFFERENTIALS IN SINGAPORE

Abstract

Since 1960, the interindustry wage structure of Singapore has changed. Rapid industrialisation has transformed the economy from an entrepot into a manufacturing-service economy. By 1990s, we would see the emergence of a service economy. The major theme of this academic exercise is to examine the trends in the interindustry wage differentials in Singapore from 1974-88 and to explain the changes, if any, that have taken place. Specifically, we will be examining the interindustry wage differentials of all-workers and three broad occupational groups, viz. professional, clerical and production. Monthly basic wages, furnished upon request from Ministry of Labour, are used for this academic exercise. Our empirical exercises found that on the whole, the interindustry wage structure from 1974-88 is stable. This structure is stable to the extent that some industrial sectors have maintained their position of wage leadership in the wage hierarchy while others have appeared unable to rise from the very bottom. Interindustry wage differentials also follow similiar patterns for workers in the three occupational groups. We also found that there has not been any appreciable narrowing of the interindustry wage differentials over this period. Short-run cyclical variations have affected the dispersion of this wage differentials.