IDEAS home Printed from https://ideas.repec.org/p/pab/wpaper/06.10.html
   My bibliography  Save this paper

Public sector wage gaps in Spanish regions

Author

Listed:
  • J. Ignacio García-Pérez

    (Department of Economics, Universidad Pablo de Olavide)

  • Juan F. Jimeno

    (Bank of Spain, Research Division)

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.

Suggested Citation

  • J. Ignacio García-Pérez & Juan F. Jimeno, 2006. "Public sector wage gaps in Spanish regions," Working Papers 06.10, Universidad Pablo de Olavide, Department of Economics.
    • Handle: RePEc:pab:wpaper:06.10
    as

    Download full text from publisher

    File URL: http://www.upo.es/serv/bib/wps/econ0610.pdf
    File Function: First version, 2006
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Adriana Kugler & Juan F. Jimeno & Virginia Hernanz, "undated". "Employment Consequences of Restrictive Permanent Contracts: Evidence from Spanish Labor Market Reforms," Working Papers 2003-14, FEDEA.
    2. Borghans, Lex & Golsteyn, Bart H.H., 2005. "Time Discounting and the Body Mass Index," IZA Discussion Papers 1597, Institute of Labor Economics (IZA).
    3. Robert Elliott & Claudio Lucifora & Dominique Meurs, 1999. "Public Sector Pay Determination in the European Union: Issues and Outcomes," Palgrave Macmillan Books, in: Robert Elliott & Claudio Lucifora & Dominique Meurs (ed.), Public Sector Pay Determination in the European Union, chapter 1, pages 1-28, Palgrave Macmillan.
    4. 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.
    5. Jimeno, Juan F. & Bentolila, Samuel, 1998. "Regional unemployment persistence (Spain, 1976-1994)," Labour Economics, Elsevier, vol. 5(1), pages 25-51, March.
    6. Robert Elliott & Claudio Lucifora & Dominique Meurs (ed.), 1999. "Public Sector Pay Determination in the European Union," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-14946-9.
    7. 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, vol. 10(3), pages 331-355, July.
    8. Juan J Dolado & Carlos Garcia--Serrano & Juan F. Jimeno, 2002. "Drawing Lessons From The Boom Of Temporary Jobs In Spain," Economic Journal, Royal Economic Society, vol. 112(721), pages 270-295, June.
    9. J. Ignacio Garcia‐Perez & Juan F. Jimeno, 2007. "Public Sector Wage Gaps In Spanish Regions," Manchester School, University of Manchester, vol. 75(4), pages 501-531, July.
    10. Claudio Lucifora & Dominique Meurs, 2006. "The Public Sector Pay Gap In France, Great Britain And Italy," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 52(1), pages 43-59, March.
    11. Carrasco, Raquel, 2001. "Binary Choice with Binary Endogenous Regressors in Panel Data: Estimating the Effect of Fertility on Female Labor Participation," Journal of Business & Economic Statistics, American Statistical Association, vol. 19(4), pages 385-394, October.
    12. Yun, Myeong-Su, 1999. "Generalized Selection Bias and The Decomposition of Wage Differentials," IZA Discussion Papers 69, Institute of Labor Economics (IZA).
    13. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, March.
    14. 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;Spanish Economic Association, vol. 6(4), pages 291-318, December.
    15. Juan F. Jimeno & Luis Toharia, 1993. "The effects of fixed-term employment on wages: theory and evidence from Spain," Investigaciones Economicas, Fundación SEPI, vol. 17(3), pages 475-494, September.
    16. 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.
    17. Borghans, Lex & Golsteyn, Bart H.H., 2005. "Time Discounting and the Body Mass Index," IZA Discussion Papers 1597, Institute of Labor Economics (IZA).
    18. Christian Dustmann & Arthur Van Soest, 1997. "Wage structures in the private and public sectors in West Germany," Fiscal Studies, Institute for Fiscal Studies, vol. 18(3), pages 225-247, August.
    19. 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 244-252, May.
    20. Gregory, Robert G. & Borland, Jeff, 1999. "Recent developments in public sector labor markets," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 53, pages 3573-3630, Elsevier.
    21. Jacob A. Mincer, 1974. "Schooling and Earnings," NBER Chapters, in: Schooling, Experience, and Earnings, pages 41-63, National Bureau of Economic Research, Inc.
    22. Cecilia Albert & Juan F. Jimeno & Gloria Moreno, 1999. "Pay Determination in the Spanish Public Sector," Palgrave Macmillan Books, in: Robert Elliott & Claudio Lucifora & Dominique Meurs (ed.), Public Sector Pay Determination in the European Union, chapter 6, pages 191-239, Palgrave Macmillan.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Domenico Depalo & Raffaela Giordano & Evangelia Papapetrou, 2015. "Public–private wage differentials in euro-area countries: evidence from quantile decomposition analysis," Empirical Economics, Springer, vol. 49(3), pages 985-1015, November.
    2. Raúl Ramos & Esteban Sanromá & Hipólito Simón, 2014. "Public-Private Sector Wage Differentials by Type of Contract: Evidence from Spain," Hacienda Pública Española / Review of Public Economics, IEF, vol. 208(1), pages 107-141, March.
    3. Lixin Cai & Amy Y.C. Liu, 2008. "Public-Private Wage Gap in Australia: Variation Along the Distribution," CEPR Discussion Papers 581, Centre for Economic Policy Research, Research School of Economics, Australian National University.
    4. Raúl Ramos & Esteban Sanromá & Hipólito Simón, 2014. "Public-Private Sector Wage Differentials by Type of Contract: Evidence from Spain," Hacienda Pública Española, IEF, vol. 208(1), pages 107-141, March.
    5. Gabriela Grotkowska & Leszek Wincenciak, 2014. "Public sector wage premium in Poland: can it be explained by structural differences in employment?," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, vol. 38.
    6. Jelena Lausev, 2014. "WHAT HAS 20 YEARS OF PUBLIC–PRIVATE PAY GAP LITERATURE TOLD US? EASTERN EUROPEAN TRANSITIONING vs. DEVELOPED ECONOMIES," Journal of Economic Surveys, Wiley Blackwell, vol. 28(3), pages 516-550, July.
    7. Gabriela Grotkowska & Leszek Wincenciak & Tomasz Gajderowicz, 2017. "Evolution of the Public-Sector Wage Premium in Poland," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 1, pages 5-31.
    8. Jakub Picka, 2014. "Problém "public-private pay gap" v České republice [The Public-Private Pay Gap in the Czech Republic]," Politická ekonomie, Prague University of Economics and Business, vol. 2014(5), pages 662-682.
    9. Raffaela Giordano & Manuel Coutinho Pereira & Domenico Depalo & Bruno Eugène & Evangelia Papapetrou & Javier J. Pérez & Lukas Reiss & Mojca Roter, 2014. "The Public Sector Pay Gap in a Selection of Euro Area Countries in the Pre-crisis Period," Hacienda Pública Española / Review of Public Economics, IEF, vol. 214(3), pages 11-34, September.
    10. repec:pra:mprapa:48888 is not listed on IDEAS
    11. Garcia-Louzao, Jose & Hospido, Laura & Ruggieri, Alessandro, 2023. "Dual returns to experience," Labour Economics, Elsevier, vol. 80(C).
    12. Axel Heitmueller, 2006. "Public-private sector pay differentials in a devolved Scotland," Journal of Applied Economics, Universidad del CEMA, vol. 9, pages 295-323, November.
    13. Tansel, Aysit & Keskin, Halil Ibrahim & Ozdemir, Zeynel Abidin, 2020. "Public-private sector wage gap by gender in Egypt: Evidence from quantile regression on panel data, 1998–2018," World Development, Elsevier, vol. 135(C).
    14. Domenico Depalo & Raffaella Giordano, 2011. "The public-private pay gap: a robust quantile approach," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 70(1), pages 25-64, January.
    15. Pérez, Javier J. & Giordano, Raffaela & Depalo, Domenico & Coutinho Pereira, Manuel & Eugène, Bruno & Papapetrou, Evangelia & Reiss, Lukas & Roter, Mojca, 2011. "The public sector pay gap in a selection of Euro area countries," Working Paper Series 1406, European Central Bank.
    16. Philip Murphy & David Blackaby & Nigel O'Leary & Anita Staneva, 2020. "Understanding What Has Been Happening to the Public‐Sector Pay Premium in Great Britain: A Distributional Approach Based on the Labour Force Survey," British Journal of Industrial Relations, London School of Economics, vol. 58(2), pages 273-300, June.
    17. Ainhoa Herrarte & Julián Moral-Carcedo & Felipe Sáez, 2012. "The impact of childbirth on Spanish women’s decisions to leave the labor market," Review of Economics of the Household, Springer, vol. 10(3), pages 441-468, September.
    18. Matteo PICCHIO, 2006. "Wage Differentials between Temporary and Permanent Workers in Italy," Working Papers 257, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    19. Su, Zhi-fang & Ma, Xiao-xiang & Xiao, Wei & Chen, Mei-Yuan, 2020. "Marginal effects of public employment on unconditional distribution of wage income in China," The North American Journal of Economics and Finance, Elsevier, vol. 54(C).
    20. Hospido, Laura & Moral-Benito, Enrique, 2016. "The public sector wage premium in Spain: Evidence from longitudinal administrative data," Labour Economics, Elsevier, vol. 42(C), pages 101-122.
    21. 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 48897, University Library of Munich, Germany.

    More about this item

    Keywords

    public sector; wage differentials; switching regressions; Spanish regions.;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pab:wpaper:06.10. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Publicación Digital - UPO (email available below). General contact details of provider: https://edirc.repec.org/data/deupoes.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.