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Public-private sector wage differentials and returns to education in Djibouti

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Author Info

  • Anos Casero, Paloma
  • Seshan, Ganesh

Abstract

Do public sector workers earn a wage premium in Djibouti and are the returns to education different across the sectors? The authors estimate private and public sector wage earnings using 1996 household survey data, while controlling for selectivity using Heckman's two stage approach. They find that Djiboutian public sector employees earn a wage premium, independent of their personal attributes and human capital endowments, and are more likely to be males and have parents in the public sector. Workers in the public sector earn higher private rates of return to education than do private sector workers with post-secondary schooling. These results raise concerns about current government hiring and wage-setting practices that generate distortions in the labor market and are not efficiently allocating labor and public resources.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3923.

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Date of creation: 01 May 2006
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Handle: RePEc:wbk:wbrwps:3923

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Related research

Keywords: Labor Markets; Public Sector Economics&Finance; Public Sector Management and Reform; Education For All; Education and Digital Divide;

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References

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  1. Aysit Tansel, 1999. "Public-Private Employment Choice, Wage Differentials and Gender in Turkey," Working Papers 797, Economic Growth Center, Yale University.
  2. Psacharopoulos, George, 1993. "Returns to investment in education : a global update," Policy Research Working Paper Series 1067, The World Bank.
  3. T. Paul Schultz, 2004. "Evidence of Returns to Schooling in Africa from Household Surveys: Monitoring and Restructuring the Market for Education," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 13(02), pages ii95-ii148, December.
  4. 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.
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Cited by:
  1. Ning, Guangjie, 2010. "Can educational expansion improve income inequality? Evidences from the CHNS 1997 and 2006 data," Economic Systems, Elsevier, vol. 34(4), pages 397-412, December.

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