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Consistent estimates of the public/private wage gap

Author

Listed:
  • Domenico Depalo

    (Banca d’Italia)

  • Santiago Pereda-Fernández

    (Banca d’Italia)

Abstract

Existing estimates of the public/private wage gap allow for possible sorting of individuals into one sector, but they rely on parametric assumptions that may introduce substantial bias in the parameter of interest. Solutions are semi- and nonparametric approaches. For Italy, the latter methods yield a gap of approximately 20%, whereas the bias from parametric assumptions is as large as 10%.

Suggested Citation

  • Domenico Depalo & Santiago Pereda-Fernández, 2020. "Consistent estimates of the public/private wage gap," Empirical Economics, Springer, vol. 58(6), pages 2937-2947, June.
    • Handle: RePEc:spr:empeco:v:58:y:2020:i:6:d:10.1007_s00181-018-1592-7
    DOI: 10.1007/s00181-018-1592-7
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    More about this item

    Keywords

    Public/private wage gap; Nonparametric regression; Sample selection;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General

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