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Public-private sector pay differentials in a devolved Scotland

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Author Info
Axel Heitmueller () (London Business School and IZA Bonn)

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Abstract

The public-private sector wage gap in Scotland in 2000 is analysed using the extension sample of the British Household Panel Study (BHPS). Employing a switching regression model, and testing for double sample selection from the participation decision and sector choice, the wage gap is shown to be 10 % for males and 24 % for females. For males this is mainly due to differences in productive characteristics and selectivity, while for females the picture is more ambiguous. Findings also suggest that there exists a male private sector wage premium. While there is no evidence of a sample selection bias for females, the sector choice of males is systematically correlated with unobservables. Furthermore, the structural switching regression indicates that expected wage differentials between sectors are an important driving force for sectoral assignment.

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File URL: http://www4.cema.edu.ar/pjae/m/136Heitmuell200611
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Publisher Info
Article provided by Universidad del CEMA in its journal Journal of Applied Economics.

Volume (Year): IX (2006)
Issue (Month): (November)
Pages: 295-323
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Handle: RePEc:cem:jaecon:v:9:y:2006:n:2:p:295-323

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Related research
Keywords: wage differentials; switching model; double sample selection; decomposition;

Find related papers by JEL classification:
J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models

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This page was last updated on 2009-11-2.

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