Public-private wage gaps : is civil-servant human capital sector-specific?
AbstractWhat would be the counterfactual wage of civil servants if they were employed in the private sector? Using the French European Household panel, we present a new approach to the wage differential between the public and the private sectors. We estimate a model, which controls both for selection into employment, and for self-selection into the public sector. We also introduce unobserved heterogeneity in the propensity to be employed in either job sector, and in the sector-specific productivity. Evidence based on the counterfactual distributions suggests a large public-private wage premium for low public wages. This conclusion also holds for women but may be explained by a weaker discrimination in the public sector. Unlike women, most male civil servants would earn more in the private sector.
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Bibliographic InfoPaper provided by Institut National de la Statistique et des Etudes Economiques, DESE in its series Documents de Travail de la DESE - Working Papers of the DESE with number g2010-16.
Date of creation: 2010
Date of revision:
counterfactual distributions; wage differentials; public and private sector; unobserved heterogeneity;
Find related papers by JEL classification:
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
- J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
- C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
- C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
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