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The Interaction between Public and Private Sector Wages

Author

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  • M. Ivanova.

Abstract

This paper studies the interactions between private and public sector wages. We raise questions about co-movement of these variables and leadership in wage setting in the short and long run. Using statistical and econometric tools we find (1) a strong and positive correlation of public and private sector wages; (2) evidence of private wage leadership in the long run. However, in the short run there are feedback effects from public wage setting (under specific political decisions) to private sector wages that affect the international competitiveness of the Russian economy.

Suggested Citation

  • M. Ivanova., 2015. "The Interaction between Public and Private Sector Wages," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 7.
  • Handle: RePEc:nos:voprec:2015-07-6
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    References listed on IDEAS

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    1. Gonzalo Fernández-de-Córdoba & Javier Pérez & José Torres, 2012. "Public and private sector wages interactions in a general equilibrium model," Public Choice, Springer, vol. 150(1), pages 309-326, January.
    2. J. Lindquist & Roger Vilhelmsson, 2006. "Is the Swedish central government a wage leader?," Applied Economics, Taylor & Francis Journals, vol. 38(14), pages 1617-1625.
    3. Lamo, Ana & Pérez, Javier J. & Schuknecht, Ludger, 2013. "Are government wages interlinked with private sector wages?," Journal of Policy Modeling, Elsevier, vol. 35(5), pages 697-712.
    4. Poterba, James M & Rueben, Kim S, 1995. "The Effect of Property-Tax Limits on Wages and Employment in the Local Public Sector," American Economic Review, American Economic Association, vol. 85(2), pages 384-389, May.
    5. Camarero, Mariam & D'Adamo, Gaetano & Tamarit, Cecilio, 2014. "Wage leadership models: A country-by-country analysis of the EMU," Economic Modelling, Elsevier, vol. 44(S1), pages 2-11.
    6. Gimpelson, Vladimir & Lukiyanova, Anna, 2009. "Are Public Sector Workers Underpaid in Russia? Estimating the Public-Private Wage Gap," IZA Discussion Papers 3941, Institute for the Study of Labor (IZA).
    7. Afonso, António & Gomes, Pedro, 2014. "Interactions between private and public sector wages," Journal of Macroeconomics, Elsevier, vol. 39(PA), pages 97-112.
    8. Ana Lamo & Javier J. Pérez & Ludger Schuknecht, 2012. "Public or Private Sector Wage Leadership? An International Perspective," Scandinavian Journal of Economics, Wiley Blackwell, vol. 114(1), pages 228-244, March.
    9. Demekas, Dimitri G & Kontolemis, Zenon G, 2000. " Government Employment and Wages and Labour Market Performance," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 62(3), pages 391-415, July.
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    12. Annette Zeilstra & Adam Elbourne, 2014. "Follow the leader? Public and private wages in the Netherlands," CPB Discussion Paper 274, CPB Netherlands Bureau for Economic Policy Analysis.
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    1. repec:nea:journl:y:2018:i:37:p:203-212 is not listed on IDEAS

    More about this item

    Keywords

    private sector wages; public sector wages; causality; VECM; Russia.;

    JEL classification:

    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General

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