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Public-Private Sector Wage Differentials in Scotland: An Endogenous Switching Model

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  • Heitmueller, Axel

    ()
    (Cabinet Office, UK)

Abstract

The 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 Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 992.

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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
Handle: RePEc:iza:izadps:dp992

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Keywords: decomposition; wage differentials; double sample selection; endogenous switching;

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  1. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
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Citations

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Cited by:
  1. Anna Iara, 2008. "Skill Diffusion by Temporary Migration? Returns to Western European Work Experience in Central and East European Countries," wiiw Working Papers 46, The Vienna Institute for International Economic Studies, wiiw.
  2. Clémence Berson, 2009. "Private vs. Public Sector : Discrimination against Second-Generation Immigrants in France," Documents de travail du Centre d'Economie de la Sorbonne 09059, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
  3. Kristjan-Olari Leping, 2005. "Public-Private Sector Wage Differential In Estonia: Evidence From Quantile Regression," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 39, Faculty of Economics and Business Administration, University of Tartu (Estonia).
  4. Anna Iara, 2006. "Skill Diffusion by Temporary Migration? Returns to Western European Working Experience in the EU Accession Countries," Development Working Papers 210, Centro Studi Luca d\'Agliano, University of Milano.
  5. Monojit Chatterji & Terhi Maczulskij & Jaakko Pehkonen, 2008. "Public Sector Pay in Finland," Dundee Discussion Papers in Economics 213, Economic Studies, University of Dundee.
  6. Budria, Santiago, 2006. "Schooling and the distribution of wages in the european private and public sectors," MPRA Paper 90, University Library of Munich, Germany.
  7. Nguyen Danh, Hoang Long, 2002. "public-private sector wage differentials for males and females in vietnam," MPRA Paper 6583, University Library of Munich, Germany.
  8. Sarah Brown & Jennifer Roberts & Karl Taylor, 2010. "Reservation wages, labour market participation and health," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 173(3), pages 501-529.
  9. Anna Lara, 2006. "Skill Diffusion by Temporary Migration? Returns to Western European Working Experience in the EU Accession Countries," wiiw Balkan Observatory Working Papers 069, The Vienna Institute for International Economic Studies, wiiw.

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