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Revisiting the public–private wage gap in Spain: new evidence and interpretation

Author

Listed:
  • Alba Couceiro de León

    (Universidad Carlos III de Madrid)

  • Juan J. Dolado

    (Universidad Carlos III de Madrid)

Abstract

This paper updates the available evidence on the public–private wage gap in Spain, which dates back to 2012. Through microdata drawn from the last three waves of the Wage Structure Survey (2010, 2014 and 2018), we study how this gap and its distribution by gender and education have evolved during and after the Great Recession. Conventional Oaxaca-Blinder decompositions are used to divide the raw wage gap into a component explained by differences in characteristics and another one capturing differences in returns and endogenous selection. The main findings are: (i) a strong wage compression by skills, and (ii) a wage premium for less-skilled women in the public sector. Both empirical results can be rationalised by a monopoly union wage-setting model with monopsonistic features and the presence of female statistical discrimination.

Suggested Citation

  • Alba Couceiro de León & Juan J. Dolado, 2023. "Revisiting the public–private wage gap in Spain: new evidence and interpretation," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 14(3), pages 353-377, December.
    • Handle: RePEc:spr:series:v:14:y:2023:i:3:d:10.1007_s13209-023-00277-z
    DOI: 10.1007/s13209-023-00277-z
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    Keywords

    Public sector; Private sector; Public–private wage gap; Monopsony; Unions;
    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
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets

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