An empirical study on real wage index of employees in nepalese higher education

Real wage index is the ratio of current year real wage and base year real wage expressed in percentage. It is based on the change of retail prices of specified quantity of goods and services. It helps in negotiations and dearness allowance adjustment due to the change in prices. So, government can make wage policy, price policy, rent control, taxation and general economic policies by using this kind of indices. Nepal has low economic growth and week infrastructure. It cannot provide the facility as developed country to their employees. Although, Nepal government has formed different pay commissions in different time and situations to maintain the standard living of employees to fulfill their basic needs like: food, house rent, clothes, health, education, communication, transportation etc but problems are not going to solve by week implementation. The pay scale for employees of higher education of Nepal is not based on the cost of living index of their employees.

This paper highlights the expenditure pattern of employees and the present salary scale which is insufficient by at least 74.22% in the current year with respect to base year. Besides it, there is at least 92.92% of total variation in annual increment of salary has been explained by time factor i.e. the increment of salary is not based on the changes of price of commodities and cost of living index of employees. The current year real wage and real wage index of all employees are also less than the base year.