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Public/private sector wage differentials in Canada-evidence from the 1991 and 1982 surveys of consumer finance

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  • David Prescott
  • Bo Wandschneider

Abstract

This paper extends the work of Gunderson and Shapiro and Stelcner that considered wage differentials between public and private sector workers in Canada using the 1971 and 1981 Censuses, respectively. Here the Survey of Consumer Finances from 1991 and 1982 is used, which allows for better distinction between public and private sector workers. The estimated public sector premium is decomposed into an endowments component and a residual term. Estimates are corrected for sample selection bias with respect to the choice between full-time and part-time work in the two sectors. Tests for bias caused by self-selection into the private and public sectors revealed no such bias. As a benchmark, the overall wage premium calculated for 1981 compares very well with that of Shapiro and Stelcner. During the 1980s no significant increases in the public sector wage premium for males are found but the female premium increased significantly. This may be due to changes in pay equity legislation in the public sector relative to the private sector.

Suggested Citation

  • David Prescott & Bo Wandschneider, 1999. "Public/private sector wage differentials in Canada-evidence from the 1991 and 1982 surveys of consumer finance," Applied Economics, Taylor & Francis Journals, vol. 31(6), pages 723-731.
    • Handle: RePEc:taf:applec:v:31:y:1999:i:6:p:723-731
    DOI: 10.1080/000368499323931
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    Cited by:

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    2. Annabella Ansah & Richard E. Mueller, 2021. "Public and Private Sector Earnings of Immigrants and the Canadian-Born: Evidence from the Labour Force Survey," Journal of International Migration and Integration, Springer, vol. 22(4), pages 1403-1429, December.
    3. Richard E. Mueller, 2022. "Gender pay gap in the public sector: Evidence from the Canadian Labour Force Survey," LABOUR, CEIS, vol. 36(1), pages 29-70, March.
    4. 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.
    5. Mathieu Narcy, 2011. "Would nonprofit workers accept to earn less? Evidence from France," Applied Economics, Taylor & Francis Journals, vol. 43(3), pages 313-326.
    6. Monojit Chatterji & Terhi Maczulskij & Jaakko Pehkonen, 2008. "Public Sector Pay in Finland," Dundee Discussion Papers in Economics 213, Economic Studies, University of Dundee.
    7. Zhuravleva, Tatiana (Журавлева, Татьяна), 2015. "Analysis of the Factors of Wages Differentiation in the Public and Private Sectors of the Russian Economy [Анализ Факторов Дифференциации Заработной Платы В Государственном И Частном Секторах Эконо," Published Papers mn10, Russian Presidential Academy of National Economy and Public Administration.
    8. Raaj Tiagi, 2010. "Public Sector Wage Premium in Canada: Evidence from Labour Force Survey," LABOUR, CEIS, vol. 24(4), pages 456-473, December.
    9. Yue Ma & Ying Chu Ng, 2008. "Bootstrapping statistical inferences of decomposition methods for gender earnings differentials," Applied Economics, Taylor & Francis Journals, vol. 40(12), pages 1583-1593.
    10. Richard E. Mueller, 2019. "Public Sector Wages In Alberta: How Do These Compare To Other Provinces And To The Private Sector?," SPP Research Papers, The School of Public Policy, University of Calgary, vol. 12(34), October.

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