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The Greek Public Sector Wage Premium before the Crisis: Size, Selection and Relative Valuation of Characteristics

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  • Rebekka Christopoulou
  • Vassilis Monastiriotis

Abstract

We examine the Greek public–private wage differential before the debt crisis to evaluate the prospective impact of the recent public sector pay cuts. We find a large public premium which persists after controlling for individual and job characteristics. For men, much of this is accounted for by self-selection into the sector that rewards better their characteristics, while for women it is largely driven by sectoral differences in returns. We attribute these effects to more egalitarian pay structures in the public sector and to demand problems in the private sector. The recent policy measures only partially change this situation, as wage deflation extends to the private sector, preserving public premia for the low paid.

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  • Rebekka Christopoulou & Vassilis Monastiriotis, 2014. "The Greek Public Sector Wage Premium before the Crisis: Size, Selection and Relative Valuation of Characteristics," British Journal of Industrial Relations, London School of Economics, vol. 52(3), pages 579-602, September.
  • Handle: RePEc:bla:brjirl:v:52:y:2014:i:3:p:579-602
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    1. repec:spr:izalpo:v:7:y:2018:i:1:d:10.1186_s40173-017-0093-1 is not listed on IDEAS
    2. Joan Daouli & Michael Demoussis & Nicholas Giannakopoulos & Ioannis Laliotis, 2017. "The wage curve before and during the Greek economic crisis," Empirical Economics, Springer, vol. 52(1), pages 59-77, February.
    3. Jelena Nikolic & Ivica Rubil & Iva Tomic, 2014. "Changes in Public and Private Sector Pay Structures in Two Emerging Market Economies during the Crisis," Working Papers 1403, The Institute of Economics, Zagreb.
    4. Horen Voskeritsian & Michail Veliziotis & Panos Kapotas & Andreas Kornelakis, 2017. "Between a Rock and a Hard Place: Social Partners and Reforms in the Wage- Setting System in Greece under Austerity'," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 114, Hellenic Observatory, LSE.
    5. 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.
    6. Andreas Kornelakis, 2016. "Inclusion or Dualization? The Political Economy of Employment Relations in Italian and Greek Telecommunications," British Journal of Industrial Relations, London School of Economics, vol. 54(2), pages 385-408, June.
    7. Rebekka Christopoulou, Maria Pantalidou & Maria Pantalidou, 2018. "The parental home as labour market insurance for young Greeks during the crisis," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 122, Hellenic Observatory, LSE.
    8. Christopoulou, Rebekka & Pantalidou, Maria, 2017. "The parental home as labor market insurance for young Greeks during the crisis," GLO Discussion Paper Series 158, Global Labor Organization (GLO).
    9. Iordanis Eleftheriadis & Vasilios Vyttas, 2017. "Risk Management and Viability of Public Organizations. Development of a Risk Measurement Tool: The Case of Greece," International Journal of Business and Economic Sciences Applied Research (IJBESAR), Eastern Macedonia and Thrace Institute of Technology (EMATTECH), Kavala, Greece, vol. 10(1), pages 55-59, March.
    10. repec:eee:ecosys:v:41:y:2017:i:2:p:248-265 is not listed on IDEAS
    11. Kollintzas, Tryphon & Papageorgiou, Dimitris & Vassilatos, Vanghelis, 2013. "A Neoclassical Growth Model for the Insiders – Outsiders Society," CEPR Discussion Papers 9640, C.E.P.R. Discussion Papers.
    12. Chletsos, Michael & Roupakias, Stelios, 2016. "Do Immigrants Compete with Natives in the Greek Labour Market? Evidence from the Skill-Cell Approach Before and During the Great Recession," MPRA Paper 75659, University Library of Munich, Germany.
    13. Tryphon Kollintzas & Dimitris Papageorgiou & Efthymios Tsionas & Vanghelis Vassilatos, 2018. "Market and political power interactions in Greece: an empirical investigation," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 7(1), pages 1-43, December.
    14. Evangelia Papapetrou & Pinelopi Tsalaporta, 2016. "Inter-industry wage differentials in Greece: rent-sharing and unobserved heterogeneity hypotheses," Working Papers 213, Bank of Greece.

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