A Contribution to the Public-Private Wage Inequality Debate: The Iconic Case of Romania
AbstractThis paper studies the public-private wage inequality in Romania. Although public sector employment is perceived as safer and offers more benefits, we find that in Romania it also offers higher wages, after controlling for experience, education, and gender. Decomposing the public-private wage premium into the effect of personal characteristics, coefficients, and residuals, we show that only about half of this premium can be attributed to personal characteristics. The premium is increasing across the wage distribution, leading to more inequality in the public sector. We also find the effects of self-selection are negligible, the premium being still positive and significant after controlling for this.
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Bibliographic InfoPaper provided by The Vienna Institute for International Economic Studies, wiiw in its series The wiiw Balkan Observatory Working Papers with number 093.
Date of creation: Feb 2011
Date of revision:
Publication status: Published as The wiiw Balkan Observatory Working Paper, February 2011
Find related papers by JEL classification:
- J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-06-25 (All new papers)
- NEP-EUR-2011-06-25 (Microeconomic European Issues)
- NEP-LAB-2011-06-25 (Labour Economics)
- NEP-TRA-2011-06-25 (Transition Economics)
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