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Public-Private Sector Pay Gaps in Finland: A Quantile Regression Analysis

Author

Listed:
  • Terhi Maczulskij

    () (School of Business and Economics, University of Jyväskylä)

  • Jaakko Pehkonen

    () (School of Business and Economics, University of Jyväskylä)

Abstract

This paper examines public-private sector wage differentials in Finland using a quantile regression method. We control for the endogeneity of the working sector and allow the returns of individual skills to vary between industries. The results suggest that men earn a premium of 3 percent in the public sector at the lower-end jobs. At the median and the upper end of the distribution, men’s pay gap is negative, varying between 5 and 10 percent. Women, in turn, always earn more in the public sector (4–10 percent), and the premium is highest at the upper end of the earnings distribution.

Suggested Citation

  • Terhi Maczulskij & Jaakko Pehkonen, 2011. "Public-Private Sector Pay Gaps in Finland: A Quantile Regression Analysis," Finnish Economic Papers, Finnish Economic Association, vol. 24(2), pages 111-127, Autumn.
  • Handle: RePEc:fep:journl:v:24:y:2011:i:2:p:111-127
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    File URL: http://www.taloustieteellinenyhdistys.fi/images/stories/fep/fep22011/fep22011_maczulskij_and_pehkonen.pdf
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    References listed on IDEAS

    as
    1. Mueller, Richard E., 1998. "Public-private sector wage differentials in Canada: evidence from quantile regressions," Economics Letters, Elsevier, vol. 60(2), pages 229-235, August.
    2. Claudio Lucifora & Dominique Meurs, 2006. "The Public Sector Pay Gap In France, Great Britain And Italy," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 52(1), pages 43-59, March.
    3. Santiago Budria, 2010. "Schooling and the distribution of wages in the European private and public sectors," Applied Economics, Taylor & Francis Journals, vol. 42(8), pages 1045-1054.
    4. Christofides, Louis N. & Pashardes, Panos, 2002. "Self/paid-employment, public/private sector selection, and wage differentials," Labour Economics, Elsevier, vol. 9(6), pages 737-762, December.
    5. Axel Heitmueller, 2006. "Public-private sector pay differentials in a devolved Scotland," Journal of Applied Economics, Universidad del CEMA, vol. 9, pages 295-323, November.
    6. Blaise Melly, 2005. "Public-private sector wage differentials in Germany: Evidence from quantile regression," Empirical Economics, Springer, vol. 30(2), pages 505-520, September.
    7. Adamchik, Vera A. & Bedi, Arjun S., 2000. "Wage differentials between the public and the private sectors: evidence from an economy in transition," Labour Economics, Elsevier, vol. 7(2), pages 203-224, March.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Terhi Maczulskij, 2012. "Employment sector and pay gaps: genetic and environmental influences," ERSA conference papers ersa12p755, European Regional Science Association.
    2. Sanna-Mari Hynninen & Terhi Maczulskij, 2013. "Spot market wages, implicit contracts and technological change: skill-level evidence from Finland," Applied Economics, Taylor & Francis Journals, vol. 45(19), pages 2715-2723, July.
    3. Maczulskij, Terhi, 2013. "Employment sector and pay gaps: Genetic and environmental influences," Labour Economics, Elsevier, vol. 23(C), pages 89-96.
    4. Maczulskij, Terhi, 2013. "Public–private sector wage differentials and the business cycle," Economic Systems, Elsevier, vol. 37(2), pages 284-301.

    More about this item

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets

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