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Public-Private Sector Pay Differentials in a Devolved Scotland

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  • Axel Heitmueller

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.

Suggested Citation

  • Axel Heitmueller, 2006. "Public-Private Sector Pay Differentials in a Devolved Scotland," Journal of Applied Economics, Taylor & Francis Journals, vol. 9(2), pages 295-323, November.
    • Handle: RePEc:taf:recsxx:v:9:y:2006:i:2:p:295-323
    DOI: 10.1080/15140326.2006.12040649
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    Cited by:

    1. Afonso, António & Gomes, Pedro, 2014. "Interactions between private and public sector wages," Journal of Macroeconomics, Elsevier, vol. 39(PA), pages 97-112.
    2. Antón, José-Ignacio & Muñoz de Bustillo, Rafael, 2013. "Public-private sector wage differentials in Spain. An updated picture in the midst of the Great Recession," MPRA Paper 48897, University Library of Munich, Germany.
    3. Anna Lovasz & Ewa Cukrowska, 2014. "Are children driving the gender wage gap? Comparative evidence from Poland and Hungary," Budapest Working Papers on the Labour Market 1404, Institute of Economics, Centre for Economic and Regional Studies.
    4. Kamila Sławińska, 2021. "Public–private sector wage gap in a group of European countries: an empirical perspective," Empirical Economics, Springer, vol. 60(4), pages 1747-1775, April.
    5. Antonio di Paolo, 2011. "Knowledge of catalan, public/prívate sector choice and earnings: Evidence from a double sample selection model," Hacienda Pública Española / Review of Public Economics, IEF, vol. 197(2), pages 9-35, June.
    6. Gabriela Grotkowska & Leszek Wincenciak & Tomasz Gajderowicz, 2017. "Evolution of the Public-Sector Wage Premium in Poland," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 1, pages 5-31.
    7. Long, Wenjin & Appleton, Simon & Song, Lina, 2013. "Job Contact Networks and Wages of Rural-Urban Migrants in China," IZA Discussion Papers 7577, Institute of Labor Economics (IZA).
    8. Miracle Ntuli & Prudence Kwenda, 2013. "Labour Unions and Wage Inequality Among African Men in South Africa," Working Papers 13159, University of Cape Town, Development Policy Research Unit.
    9. Angela (Xia) Liu & Tridib Mazumdar & Bo Li, 2015. "Counterfactual Decomposition of Movie Star Effects with Star Selection," Management Science, INFORMS, vol. 61(7), pages 1704-1721, July.
    10. Ferreira Lima, Luis Cristovao, 2013. "A Persistente Desigualdade nas Grandes Cidades Brasileiras: o Caso de Brasília [The Persistent Inequality in the Great Brazilian Cities: The case of Brasília]," MPRA Paper 50936, University Library of Munich, Germany.
    11. Ferreira Lima, Luis Cristovao, 2013. "The Persistent Inequality in the Great Brazilian Cities: The Case of Brasília," MPRA Paper 50938, University Library of Munich, Germany.
    12. Gabriela Grotkowska & Leszek Wincenciak, 2014. "Public sector wage premium in Poland: can it be explained by structural differences in employment?," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, vol. 38.
    13. Kwadwo Opoku & Emmanuel Adu Boahen, 2023. "Gender wage gaps in Ghana: a comparison across different selection models," SN Business & Economics, Springer, vol. 3(7), pages 1-33, July.
    14. Edwin van Gameren & Ingrid Ooms, 2009. "Childcare and labor force participation in the Netherlands: the importance of attitudes and opinions," Review of Economics of the Household, Springer, vol. 7(4), pages 395-421, December.
    15. Pedro Gomes, 2009. "Labour market effects of public sector employment and wages," 2009 Meeting Papers 313, Society for Economic Dynamics.
    16. Gabriela Grotkowska & Leszek Wincenciak & Tomasz Gajderowicz, 2018. "Public–private wage differential in a post‐transition economy," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 26(3), pages 495-522, July.
    17. Wang, Zhenhua & Liu, Qiaochu & Yang, Jian & Jiang, Jinqi, 2021. "Can Technology Demonstration Promote Rural Households’ Adoption of Conservation Tillage in the Main Grain-Producing Areas of China?," 2021 Conference, August 17-31, 2021, Virtual 315171, International Association of Agricultural Economists.
    18. Nikolic, Jelena & Rubil, Ivica & Tomić, Iva, 2017. "Pre-crisis reforms, austerity measures and the public-private wage gap in two emerging economies," Economic Systems, Elsevier, vol. 41(2), pages 248-265.
    19. Louis Christofides & Maria Michael, 2013. "Exploring the public-private sector wage gap in European countries," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-53, December.
    20. Galanakis, Yannis, 2020. "Female Human Capital Mismatch: An extension for the British public sector," GLO Discussion Paper Series 669, Global Labor Organization (GLO).

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