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Public sector wage gaps in Spanish regions

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  • Ignacio García-Pérez

    ()
    (Universidad Pablo de Olavide de Sevilla)

  • Juan F. Jimeno

    ()
    (Banco de España)

Abstract

This paper provides an approximation to the measurement of public sector wage gaps in Spanish regions. By using data from the European Community Household Panel, it is shown that the balance between what private firms pay in the local market and what the public sector pays, differs substantially in different areas of the country. Public sector wage differences among Spanish regions are mostly due to differences in returns, not to differences in characteristics or to selection effects, and are not constant across gender, educational levels, or occupations. Moreover, in those regions where Regional Governments have a higher weight in public employment, public wage gaps are higher and public employers pay higher returns. There also seems to be a cross regional positive correlation between public wage gaps and unemployment, and a negative one between labour productivity and public wage gaps. Hence, a tentative conclusion is that the incentives to select into the public sector are higher in the low productivity regions, precisely those where scarcity of human capital in the private sector may be the most important factor for explaining economic backwardness.

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File URL: http://www.bde.es/f/webbde/SES/Secciones/Publicaciones/PublicacionesSeriadas/DocumentosTrabajo/05/Fic/dt0526e.pdf
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Bibliographic Info

Paper provided by Banco de Espa�a in its series Banco de Espa�a Working Papers with number 0526.

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Length: 51 pages
Date of creation: Aug 2005
Date of revision:
Handle: RePEc:bde:wpaper:0526

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  1. Yun, Myeong-Su, 1999. "Generalized Selection Bias and The Decomposition of Wage Differentials," IZA Discussion Papers 69, Institute for the Study of Labor (IZA).
  2. Raquel Carrasco, 1999. "Binary Choice with Binary Endogenous Regressors in Panel Data: Estimating the Effect of Fertility on Female Labour Participation," Working Papers, Fondazione Eni Enrico Mattei 1999.3, Fondazione Eni Enrico Mattei.
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  4. María A.Davia & Virginia Hernanz, 2004. "Temporary employment and segmentation in the Spanish labour market: An empirical analysis through the study of wage differentials," Spanish Economic Review, Springer, Springer, vol. 6(4), pages 291-318, December.
  5. Jimeno, Juan F. & Bentolila, Samuel, 1998. "Regional unemployment persistence (Spain, 1976-1994)," Labour Economics, Elsevier, Elsevier, vol. 5(1), pages 25-51, March.
  6. Liliana E. Pezzin & Barbara Steinberg Schone, 1999. "Intergenerational Household Formation, Female Labor Supply and Informal Caregiving: A Bargaining Approach," Journal of Human Resources, University of Wisconsin Press, vol. 34(3), pages 475-503.
  7. Adriana Kugler & Juan F. Jimeno & Virginia Hernanz, 2002. "Employment consequences of restrictive permanent contracts: Evidence from Spanish labor market reforms," Economics Working Papers, Department of Economics and Business, Universitat Pompeu Fabra 651, Department of Economics and Business, Universitat Pompeu Fabra.
  8. Prescott, David & Wilton, David, 1992. "The Determinants of Wage Changes in Indexed.and Nonindexed Contracts: A Switching Model," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 10(3), pages 331-55, July.
  9. Dustmann, C. & Soest, A.H.O. van, 1997. "Wage structures in the private and public sectors in West Germany," Open Access publications from Tilburg University urn:nbn:nl:ui:12-74120, Tilburg University.
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  11. van der Gaag, Jacques & Vijverberg, Wim, 1988. "A Switching Regression Model for Wage Determinants in the Public and Private Sectors of a Developing Country," The Review of Economics and Statistics, MIT Press, vol. 70(2), pages 244-52, May.
  12. Juan F. Jimeno & Luis Toharia, 1993. "The effects of fixed-term employment on wages: theory and evidence from Spain," Investigaciones Economicas, Fundación SEPI, Fundación SEPI, vol. 17(3), pages 475-494, September.
  13. George J. Borjas, 2002. "The Wage Structure and the Sorting of Workers into the Public Sector," NBER Working Papers 9313, National Bureau of Economic Research, Inc.
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Citations

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Cited by:
  1. Ramos, Raul & Sanromá, Esteban & Simón, Hipólito, 2014. "Public-Private Sector Wage Differentials by Type of Contract: Evidence from Spain," IZA Discussion Papers 8158, Institute for the Study of Labor (IZA).
  2. Domenico Depalo & Raffaela Giordano & Evangelia Papapetrou, 2013. "Public-private wage differentials in euro area countries: evidence from quantile decomposition analysis," Temi di discussione (Economic working papers), Bank of Italy, Economic Research and International Relations Area 907, Bank of Italy, Economic Research and International Relations Area.
  3. Luis J. Álvarez & Pablo Burriel & Ignacio Hernando, 2005. "Price setting behaviour in Spain: evidence from micro PPI data," Banco de Espa�a Working Papers, Banco de Espa�a 0527, Banco de Espa�a.
  4. Gabriel Jiménez & Vicente Salas-Fumás & Jesús Saurina, 2006. "Credit market competition, collateral and firms' finance," Banco de Espa�a Working Papers, Banco de Espa�a 0612, Banco de Espa�a.
  5. Óscar J. Arce & David López-Salido, 2006. "House Prices, Rents, and Interest Rates under Collateral Constraints," Banco de Espa�a Working Papers, Banco de Espa�a 0610, Banco de Espa�a.
  6. Gabriele Cardullo, 2012. "Public Sector Wage Bargaining, Unemployment, and Inequality," DEP - series of economic working papers, University of Genoa, Research Doctorate in Public Economics 2/2012, University of Genoa, Research Doctorate in Public Economics.
  7. Francisco de Castro & Pablo Hernández de Cos, 2006. "The economic effects of exogenous fiscal shocks in Spain: a SVAR approach," Banco de Espa�a Working Papers, Banco de Espa�a 0604, Banco de Espa�a.
  8. Mario Izquierdo & Aitor Lacuesta, 2006. "Wage inequality in Spain: recent developments," Banco de Espa�a Working Papers, Banco de Espa�a 0615, Banco de Espa�a.
  9. 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 48888, University Library of Munich, Germany.
  10. Paloma López-García & Sergio Puente, 2006. "Business demography in Spain: determinants of firm survival," Banco de Espa�a Working Papers, Banco de Espa�a 0608, Banco de Espa�a.
  11. Hospido, Laura & Moral-Benito, Enrique, 2014. "The Public Sector Wage Premium in Spain: Evidence from Longitudinal Administrative Data," IZA Discussion Papers 8315, Institute for the Study of Labor (IZA).

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