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Public-Private Sector Pay Gaps in Finland: A Quantile Regression Analysis

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Author Info

  • Terhi Maczulskij

    ()
    (School of Business and Economics, University of Jyväskylä)

  • Jaakko Pehkonen

    ()
    (School of Business and Economics, University of Jyväskylä)

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    Abstract

    This paper examines public-private sector wage differentials in Finland using a quantile regression method. We control for the endogeneity of the working sector and allow the returns of individual skills to vary between industries. The results suggest that men earn a premium of 3 percent in the public sector at the lower-end jobs. At the median and the upper end of the distribution, men’s pay gap is negative, varying between 5 and 10 percent. Women, in turn, always earn more in the public sector (4–10 percent), and the premium is highest at the upper end of the earnings distribution.

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    Bibliographic Info

    Article provided by Finnish Economic Association in its journal Finnish Economic Papers.

    Volume (Year): 24 (2011)
    Issue (Month): 2 (Autumn)
    Pages: 111-127

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    Handle: RePEc:fep:journl:v:24:y:2011:i:2:p:111-127

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    Web page: http://www.taloustieteellinenyhdistys.fi
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    1. Christofides, Louis N. & Pashardes, Panos, 2002. "Self/paid-employment, public/private sector selection, and wage differentials," Labour Economics, Elsevier, vol. 9(6), pages 737-762, December.
    2. Santiago Budria, 2010. "Schooling and the distribution of wages in the European private and public sectors," Applied Economics, Taylor & Francis Journals, vol. 42(8), pages 1045-1054.
    3. Lucifora, Claudio & Meurs, Dominique, 2004. "The Public Sector Pay Gap in France, Great Britain and Italy," IZA Discussion Papers 1041, Institute for the Study of Labor (IZA).
    4. Blaise Melly, 2005. "Public-private sector wage differentials in Germany: Evidence from quantile regression," Empirical Economics, Springer, vol. 30(2), pages 505-520, 09.
    5. Adamchik, Vera A. & Bedi, Arjun S., 2000. "Wage differentials between the public and the private sectors: evidence from an economy in transition," Labour Economics, Elsevier, vol. 7(2), pages 203-224, March.
    6. Axel Heitmueller, 2006. "Public-private sector pay differentials in a devolved Scotland," Journal of Applied Economics, Universidad del CEMA, vol. 0, pages 295-323, November.
    7. 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.
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    Cited by:
    1. Maczulskij, Terhi, 2013. "Employment sector and pay gaps: Genetic and environmental influences," Labour Economics, Elsevier, vol. 23(C), pages 89-96.
    2. Terhi Maczulskij, 2012. "Employment sector and pay gaps: genetic and environmental influences," ERSA conference papers ersa12p755, European Regional Science Association.
    3. Maczulskij, Terhi, 2013. "Public–private sector wage differentials and the business cycle," Economic Systems, Elsevier, vol. 37(2), pages 284-301.

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