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Does it pay to work in the public sector?

  • Richard Disney


    (Institute for Fiscal Studies and University of Nottingham)

  • Amanda Gosling


    (Institute for Fiscal Studies and University of Essex)

This paper uses microeconomic data from the British Household Panel and General Household Surveys to describe how the distribution of pay differs between the public and private sectors in 1983 and in the early 1990s. Separate analyses by gender and education group reveal that it is women and those with intermediate-level qualifications who do best in the public sector. The large differences between the shapes of the conditional (that is, holding age and education constant)distributions of wages in the public and private sectors are demonstrated using quantile regressions estimated separately for each education group. The paper also exploits the longitudinal structure of the data used to assess how much of these differences can be explained by the unobserved characteristics of individuals.

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Article provided by Institute for Fiscal Studies in its journal Fiscal Studies.

Volume (Year): 19 (1998)
Issue (Month): 4 (November)
Pages: 347-374

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Handle: RePEc:ifs:fistud:v:19:y:1998:i:4:p:347-374
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  1. Dustmann, C. & van Soest, A.H.O., 1997. "Wage structures in the private and public sectors in West Germany," Other publications TiSEM f1b3bfed-ce84-471a-a9d7-1, Tilburg University, School of Economics and Management.
  2. James M. Poterba & Kim S. Rueben, 1994. "The Distribution of Public Sector Wage Premia: New Evidence Using Quantile Regression Methods," NBER Working Papers 4734, National Bureau of Economic Research, Inc.
  3. Lemieux, Thomas, 1998. "Estimating the Effects of Unions on Wage Inequality in a Panel Data Model with Comparative Advantage and Nonrandom Selection," Journal of Labor Economics, University of Chicago Press, vol. 16(2), pages 261-91, April.
  4. Dustmann, Christian & van Soest, Arthur, 1998. "Public and private sector wages of male workers in Germany," European Economic Review, Elsevier, vol. 42(8), pages 1417-1441, September.
  5. James Heckman, 1998. "What should be our human capital investment policy?," Fiscal Studies, Institute for Fiscal Studies, vol. 19(2), pages 103-119, May.
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