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Public-Private Employment Choice, Wage Differentials and Gender in Turkey

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  • Aysit Tansel

    ()
    (Department of Economics, Middle East Technical University)

Abstract

There is no evidence on the extent of public versus private wage differentials in Turkey. The main objective of this paper is to examine the factors which explain the employment choice and the wage differentials in the public administration, state owned enterprises and the formal private wage sector in Turkey. Selectivity corrected wage equations are estimated for each sector for men and women separately. Oaxaca decomposition of the wage differentials between sectors for men and women is carried out. For this purpose, results of the 1994 Household Expenditure Survey conducted by the State Institute of Statistics are used. Results indicate that when controlled for observed characteristics and sample selection, for men, public administration wages are at parity or lower than private sector wages in particular at the university level. State economic enterprise wages for men are higher than private sector wages except at the university level. Opposite results are obtained for women: their wages are at par or higher in public administration than in the private sector. Further, while wages of men and women are at parity in the public administration, there is a large gender wage-gap in the private sector. Private returns to schooling are found to be lower in the public rather than in the private sector.

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Bibliographic Info

Paper provided by Economic Research Forum in its series Working Papers with number 9913.

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Length: 16 pages
Date of creation: May 1999
Date of revision: May 1999
Publication status: Published by The Economic Research Forum (ERF)
Handle: RePEc:erg:wpaper:9913

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References

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  1. Dustmann, C. & van Soest, A., 1997. "Public and Private Sector Wages of Male Workers in Germany," Economics Working Papers eco97/13, European University Institute.
  2. 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.
  3. Falaris, Evangelos M., 2004. "Private and public sector wages in Bulgaria," Journal of Comparative Economics, Elsevier, vol. 32(1), pages 56-72, March.
  4. Lee, Lung-Fei, 1983. "Generalized Econometric Models with Selectivity," Econometrica, Econometric Society, vol. 51(2), pages 507-12, March.
  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.
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  7. Jacob Mincer, 1958. "Investment in Human Capital and Personal Income Distribution," Journal of Political Economy, University of Chicago Press, vol. 66, pages 281.
  8. Psacharopoulos, George, 1993. "Returns to investment in education : a global update," Policy Research Working Paper Series 1067, The World Bank.
  9. T. Paul Schultz, 1990. "Testing the Neoclassical Model of Family Labor Supply and Fertility," Journal of Human Resources, University of Wisconsin Press, vol. 25(4), pages 599-634.
  10. Terrell, Katherine, 1993. "Public-private wage differentials in Haiti Do public servants earn a rent?," Journal of Development Economics, Elsevier, vol. 42(2), pages 293-314, December.
  11. Assaad, Ragui, 1997. "The Effects of Public Sector Hiring and Compensation Policies on the Egyptian Labor Market," World Bank Economic Review, World Bank Group, vol. 11(1), pages 85-118, January.
  12. Lindauer, David L. & Sabot, Richard H., 1983. "The public/private wage differential in a poor urban economy," Journal of Development Economics, Elsevier, vol. 12(1-2), pages 137-152.
  13. Borjas, George J, 1980. "Wage Determination in the Federal Government: The Role of Constituents and Bureaucrats," Journal of Political Economy, University of Chicago Press, vol. 88(6), pages 1110-47, December.
  14. 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.
  15. Tansel, A., 1992. "Wage Employment, Earnings and Returns to Schooling for Men and Women in Turkey," Papers 661, Yale - Economic Growth Center.
  16. Niskanen, William A, 1975. "Bureaucrats and Politicians," Journal of Law and Economics, University of Chicago Press, vol. 18(3), pages 617-43, December.
  17. Lassibille, Gerard, 1998. "Wage Gaps Between the Public and Private Sectors in Spain," Economics of Education Review, Elsevier, vol. 17(1), pages 83-92, February.
  18. Heckman, James J, 1974. "Shadow Prices, Market Wages, and Labor Supply," Econometrica, Econometric Society, vol. 42(4), pages 679-94, July.
  19. Morley Gunderson, 1979. "Earnings Differentials between the Public and Private Sectors," Canadian Journal of Economics, Canadian Economics Association, vol. 12(2), pages 228-42, May.
  20. Idson, Todd L & Feaster, Daniel J, 1990. "A Selectivity Model of Employer-Size Wage Differentials," Journal of Labor Economics, University of Chicago Press, vol. 8(1), pages 99-122, January.
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