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Public Sector Wages and Bureaucratic Quality: Evidence from Latin America

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  • Ugo Panizza

Abstract

The purpose of this paper is to present evidence on public-private wage differential for a sample of Latin American countries and to discuss the relationship between public-private wage differentials and bureaucratic quality in the Region. The paper starts by estimating public-private wage differentials for a sample of 17 Latin American countries covering 88 percent of the population of the Region. Next, the paper looks at the relationship between bureaucratic quality and public-private wage differentials and finds that, while there is no correlation between average public sector wages and bureaucratic quality, there is a positive correlation between bureaucratic quality and the degree

Suggested Citation

  • Ugo Panizza, 2001. "Public Sector Wages and Bureaucratic Quality: Evidence from Latin America," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Fall 2001), pages 97-152, August.
    • Handle: RePEc:col:000425:008703
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    Cited by:

    1. Gans-Morse, Jordan & Borges, Mariana & Makarin, Alexey & Mannah-Blankson, Theresa & Nickow, Andre & Zhang, Dong, 2018. "Reducing bureaucratic corruption: Interdisciplinary perspectives on what works," World Development, Elsevier, vol. 105(C), pages 171-188.
    2. Ricardo Hausmann & Ljubica Nedelkoska & Sehar Noor, 2020. "You Get What You Pay For: Sources and Consequences of the Public Sector Premium in Albania and Sri Lanka," CID Working Papers 376, Center for International Development at Harvard University.
    3. Glomm, Gerhard & Jung, Juergen & Tran, Chung, 2009. "Macroeconomic implications of early retirement in the public sector: The case of Brazil," Journal of Economic Dynamics and Control, Elsevier, vol. 33(4), pages 777-797, April.
    4. Arzu Yavuz, 2011. "Productivity and Wage Differentials between Private and Public Sector in the Developing Countries (Gelismekte Olan �lkelerde �zel ve Kamu Sekt�r�ndeki Verimlilik ve �cret Farklilasmasi)," Working Papers 1103, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
    5. Coppola, Andrea & Calvo-Gonzalez, Oscar, 2011. "Higher wages, lower pay : public vs. private sector compensation in Peru," Policy Research Working Paper Series 5858, The World Bank.
    6. Macchiavello, Rocco, 2008. "Public sector motivation and development failures," Journal of Development Economics, Elsevier, vol. 86(1), pages 201-213, April.
    7. Panizza, Ugo & Qiang, Christine Zhen-Wei, 2005. "Public-private wage differential and gender gap in Latin America: Spoiled bureaucrats and exploited women?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 34(6), pages 810-833, December.
    8. Dzhumashev, Ratbek, 2014. "Corruption and growth: The role of governance, public spending, and economic development," Economic Modelling, Elsevier, vol. 37(C), pages 202-215.
    9. Mizala, Alejandra & Romaguera, Pilar & Gallegos, Sebastián, 2011. "Public–private wage gap in Latin America (1992–2007): A matching approach," Labour Economics, Elsevier, vol. 18(S1), pages 115-131.
    10. Demirgüç-Kunt, Asli & Lokshin, Michael & Kolchin, Vladimir, 2023. "Effects of public sector wages on corruption: Wage inequality matters," Journal of Comparative Economics, Elsevier, vol. 51(3), pages 941-959.
    11. Glomm Gerhard & Jung Juergen & Lee Changmin & Tran Chung, 2010. "Public Sector Pension Policies and Capital Accumulation in an Emerging Economy: The Case of Brazil," The B.E. Journal of Macroeconomics, De Gruyter, vol. 10(1), pages 1-40, June.
    12. Ballestero, Andrea, 2021. "Wage gap between public and private sector analysis in Costa Rica: evidence found based on household surveys from 2006 to 2016," Revista de Ciencias Económicas, Instituto de Investigaciones en Ciencias Económicas, Universidad de Costa Rica, vol. 39(1), January.
    13. Rhea Molato, 2015. "Public-Private Wage Differentials and the Quality of Government Workers in the Philippines," Working Papers tax-mpg-rps-2015-06, Max Planck Institute for Tax Law and Public Finance.
    14. Alejandra Mizala & Pilar Romaguera & Sebastian Gallegos, 2010. "Public-Private Wage Gap In Latin America (1999-2007): A Matching Approach," Documentos de Trabajo 268, Centro de Economía Aplicada, Universidad de Chile.
    15. Naeem Akram, 2022. "Public-Private Wage Differentials: Evidence from Pakistan," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 27(2), pages 39-64, July-Dec.
    16. World Bank, 2007. "Mongolia : Building the Skills for the New Economy," World Bank Publications - Reports 7746, The World Bank Group.
    17. Frenkel, Roberto & Ros, Jaime, 2004. "Unemployment, macroeconomic policy and labor market flexibility: Argentina and Mexico in the 1990s," Sede de la CEPAL en Santiago (Estudios e Investigaciones) 31908, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    18. Nelson Marconi & Paulo Arvate & João Moura Neto & Paulo Palombo, 2009. "Vertical transfers and the appropriation of resources by the bureaucracy: the case of Brazilian state governments," Public Choice, Springer, vol. 141(1), pages 65-85, October.
    19. Łukasz Piętak, 2022. "Regional disparities, transmission channels and country's economic growth," Journal of Regional Science, Wiley Blackwell, vol. 62(1), pages 270-306, January.
    20. Van-Ha Le & Jakob de Haan & Erik Dietzenbacher & Jakob de Haan, 2013. "Do Higher Government Wages Reduce Corruption? Evidence Based on a Novel Dataset," CESifo Working Paper Series 4254, CESifo.
    21. Eréndira León Bravo, 2022. "Three essays on education, wages, and the labour market in Mexico," Economics PhD Theses 0322, Department of Economics, University of Sussex Business School.
    22. World Bank, 2004. "Uruguay : Poverty Update 2003," World Bank Publications - Reports 15682, The World Bank Group.
    23. Ratbek Dzhumashev, 2014. "The Two-Way Relationship Between Government Spending And Corruption And Its Effects On Economic Growth," Contemporary Economic Policy, Western Economic Association International, vol. 32(2), pages 403-419, April.
    24. Gerhard Glomm & Juergen Jung & Changmin Lee & Chung Tran, 2009. "Public Sector Pension Policies and Capital Accumulation in Emerging Economies," Discussion Papers 2009-10, School of Economics, The University of New South Wales.
    25. Quintero, Luis E. & Roberts, Mark, 2023. "Cities and productivity: Evidence from 16 Latin American and Caribbean countries," Journal of Urban Economics, Elsevier, vol. 136(C).

    More about this item

    Keywords

    Public Sector Labor Market; Institutional Quality; and Corruption;
    All these keywords.

    JEL classification:

    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets

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