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A New Method for Estimating Public Sector Pay Premia: Evidence from Britain in the 1990's

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  • Disney, Richard F
  • Gosling, Amanda

Abstract

This Paper looks at public sector pay in Britain. We present a novel instrument that exploits the variation in public sector status across individuals arising from the privatisation programme of the 1990s. We show formally that results that are estimated may thereby be robust to self-selection and measurement error, both of which are important and which bias cross-sectional estimates. Our results suggest that women in the public sector earn more then they could elsewhere, whilst, on average, men do not.

Suggested Citation

  • Disney, Richard F & Gosling, Amanda, 2003. "A New Method for Estimating Public Sector Pay Premia: Evidence from Britain in the 1990's," CEPR Discussion Papers 3787, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:3787
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Monojit Chatterji & Karen Mumford & Peter Smith, 2011. "The public-private sector gender wage differential in Britain: evidence from matched employee-workplace data," Applied Economics, Taylor & Francis Journals, vol. 43(26), pages 3819-3833.
    2. Fabien Postel-Vinay & Hélène Turon, 2007. "The Public Pay Gap in Britain: Small Differences That (Don't?) Matter," Economic Journal, Royal Economic Society, vol. 117(523), pages 1460-1503, October.
    3. Bargain, Olivier & Melly, Blaise, 2008. "Public Sector Pay Gap in France: New Evidence Using Panel Data," IZA Discussion Papers 3427, Institute for the Study of Labor (IZA).
    4. Dickson, Matt & Postel-Vinay, Fabien & Turon, Hélène, 2014. "The lifetime earnings premium in the public sector: The view from Europe," Labour Economics, Elsevier, vol. 31(C), pages 141-161.
    5. Rowena Crawford & Richard Disney, 2015. "Wage regulation and the quality of police officer recruits," IFS Working Papers W15/19, Institute for Fiscal Studies.
    6. Nigel F. B. Allington & Philip I. Morgan, 2003. "Does it Pay to Work in the Public Sector? Evidence from Three Decades of Econometric Analyses," Public Money & Management, Taylor & Francis Journals, vol. 23(4), pages 253-262, October.
    7. Boyle, Gerry & McElligott, Rory & O'Leary, Jim, 2004. "Public-Private Wage Differentials in Ireland, 1994-2001," Quarterly Economic Commentary: Special Articles, Economic and Social Research Institute (ESRI), vol. 2004(2-Summer), pages 1-23.

    More about this item

    Keywords

    measurement error; pay determination; selection effects;

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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