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Public employment and earnings inequality: An analysis based on conditional and unconditional quantile regressions

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  • Fournier, Jean-Marc
  • Koske, Isabell

Abstract

Studies investigating the link between public employment and earnings inequality based on micro data typically make use of conditional quantile regressions. Such analysis reveals why earnings may be more or less dispersed among public-sector than private-sector workers, but does not allow drawing conclusions about its impact on overall earnings inequality. The unconditional quantile regression technique proposed by Firpo et al. (2009) overcomes this deficiency, and this technique is applied here to show that a fall in public employment may raise or reduce earnings inequality, depending on country specificities. The paper also highlights the complementary roles of conditional and unconditional quantile regressions in investigating the determinants of earnings inequality.

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Bibliographic Info

Article provided by Elsevier in its journal Economics Letters.

Volume (Year): 121 (2013)
Issue (Month): 2 ()
Pages: 263-266

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Handle: RePEc:eee:ecolet:v:121:y:2013:i:2:p:263-266

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Web page: http://www.elsevier.com/locate/ecolet

Related research

Keywords: Quantile regression; Income inequality; Public employment;

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References

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  1. Mueller, Richard E., 1998. "Public-private sector wage differentials in Canada: evidence from quantile regressions," Economics Letters, Elsevier, vol. 60(2), pages 229-235, August.
  2. César Calderón & Alberto Chong & Rodrigo Valdés, 2004. "Labor Market Regulations and Income Inequality: Evidence for a Panel of Countries," Research Department Publications 4375, Inter-American Development Bank, Research Department.
  3. Easterly, William & Baqir, Reza & Alesina, Alberto, 2000. "Redistributive Public Employment," Scholarly Articles 4553013, Harvard University Department of Economics.
  4. Richard B. Freeman, 1980. "Unionism and the dispersion of wages," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 34(1), pages 3-23, October.
  5. Winfried Koeniger & Marco Leonardi & Luca Nunziata, 2007. "Labor Market Institutions and Wage Inequality," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 60(3), pages 340-356, April.
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  7. Omar Arias & Walter Sosa-Escudero & Kevin F. Hallock, 2001. "Individual heterogeneity in the returns to schooling: instrumental variables quantile regression using twins data," Empirical Economics, Springer, vol. 26(1), pages 7-40.
  8. Robinson, Sherman, 1976. "A Note on the U Hypothesis Relating Income Inequality and Economic Development," American Economic Review, American Economic Association, vol. 66(3), pages 437-40, June.
  9. Jacob Mincer, 1958. "Investment in Human Capital and Personal Income Distribution," Journal of Political Economy, University of Chicago Press, vol. 66, pages 281.
  10. Sergio Firpo & Nicole M. Fortin & Thomas Lemieux, 2009. "Unconditional Quantile Regressions," Econometrica, Econometric Society, vol. 77(3), pages 953-973, 05.
  11. Jean-Marc Fournier & Isabell Koske, 2012. "The determinants of earnings inequality: evidence from quantile regressions," OECD Journal: Economic Studies, OECD Publishing, vol. 2012(1), pages 7-36.
  12. Daniele Checchi & Claudio Lucifora, 2002. "Unions and labour market institutions in Europe," Departmental Working Papers 2002-16, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
  13. Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, vol. 46(1), pages 33-50, January.
  14. Damian Grimshaw, 2000. "Public Sector Employment, Wage Inequality and the Gender Pay Ratio in the UK," International Review of Applied Economics, Taylor & Francis Journals, vol. 14(4), pages 427-448.
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Cited by:
  1. Deborah A. Cobb-Clark & Sonja C. Kassenboehmer & Mathias G. Sinning, 2013. "Locus of Control and Savings," Melbourne Institute Working Paper Series wp2013n42, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.

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