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Going subnational: wage differentials across levels of government in Brazil, Mexico and Uruguay

Author

Listed:
  • Baez, Maria Josefina
  • Brassiolo, Pablo
  • Estrada, Ricardo
  • Fajardo, Gustavo

Abstract

Workers at subnational governments play a prominent role in the delivery of public services in most countries. Yet, information about their remuneration is scarce. Using data for Brazil, Mexico and Uruguay, we document that national government employees earn on average higher wages than observationally similar subnational employees; consequently, public-private sector wage gaps vary significantly by level of government. Then we use individual fixed-effects to estimate the wage premium to public sector employment (the wage gap net of selection effects) for Brazil and Mexico. We find that i) both national and subnational public employees receive a significant wage premium with respect to private sector employment; and ii) the difference between the national and subnational wage premiums is small in Brazil and null in Mexico.

Suggested Citation

  • Baez, Maria Josefina & Brassiolo, Pablo & Estrada, Ricardo & Fajardo, Gustavo, 2021. "Going subnational: wage differentials across levels of government in Brazil, Mexico and Uruguay," Research Department working papers 1856, CAF Development Bank Of Latinamerica.
    • Handle: RePEc:dbl:dblwop:1856
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    Cited by:

    1. is not listed on IDEAS
    2. Liang, Qingquan & Zeng, Weihong & Yi, Lan, 2025. "Examining the wage gap between public and non-public sector in China: Insights from a robust quantile selection model," China Economic Review, Elsevier, vol. 92(C).
    3. Tomás R. Martinez & Antonio Martins-Neto & Ursula Mello, 2024. "Gender and Top Lifetime Earnings Inequality: Ten New Facts from Brazil," Business and Economics Working Papers 242, Unidade de Negocios e Economia, Insper.

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    Keywords

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    JEL classification:

    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
    • M50 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - General

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