Public-Private Sector Wage Differentials in Scotland: An Endogenous Switching Model
AbstractThe public-private sector wage gap in Scotland in 2000 is analysed using the extension sample of the British Household Panel Survey (BHPS). Employing an endogenous switching model, and testing for double sample selection from the participation decision and sector choice, the unadjusted wage gap is shown to be 10 per cent for males and 24 per cent for females. For males this is mainly due to differences in productive characteristics and selectivity. For females the picture is more ambiguous. Findings also suggest that there exists a substantial wage premium for male private sector employees. 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.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 992.
Length: 35 pages
Date of creation: Jan 2004
Date of revision:
Publication status: published as 'Public-private sector pay differentials in a devolved Scotland' in: Journal of Applied Economics, 2006, 9, 295-323
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Find related papers by JEL classification:
- J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-02-08 (All new papers)
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