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Public-private wage differential in a post-transition economy: A copula approach to the switching regression model

Author

Listed:
  • Gabriela Grotkowska

    (Faculty of Economic Sciences, University of Warsaw)

  • Leszek Wincenciak

    (Faculty of Economic Sciences, University of Warsaw)

  • Tomasz Gajderowicz

    (Faculty of Economic Sciences, University of Warsaw)

Abstract

In this study, we estimate the public sector wage premium in a post-transition economy, a quarter of a century since the collapse of the old regime. Our methodology uses a copula method to estimate the switching regression model, which allows for the relaxation of the restrictive assumption of joint normality. We control for employment selection into both sectors using an instrument based on information regarding learned professions. We use data from the Polish Survey of Earnings by Occupations (2012). Contrary to earlier results for Poland, we found positive selection into employment in both sectors, with positive ATET and negative ATEU. The results suggest that both private and public sector employees select themselves into the sector in which they earn more than they would in a counterfactual scenario.

Suggested Citation

  • Gabriela Grotkowska & Leszek Wincenciak & Tomasz Gajderowicz, 2016. "Public-private wage differential in a post-transition economy: A copula approach to the switching regression model," Working Papers 2016-19, Faculty of Economic Sciences, University of Warsaw.
    • Handle: RePEc:war:wpaper:2016-19
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    File URL: http://www.wne.uw.edu.pl/index.php/download_file/2940/
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    References listed on IDEAS

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    2. 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.

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    More about this item

    Keywords

    public sector; private sector; wage differentials; switching regression;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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