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The Public-Private Sector Wage Differential: Gender, Workplaces and Family Friendliness

Author

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  • Monojit Chatterji
  • Karen Mumford
  • Peter N Smith

Abstract

This study examines the role of individual characteristics, occupation, and workplace features accounting for differences in hourly earnings between male and female fulltime employees in the public and private sectors. Using new linked employeeemployer data for Britain in 2004, we find that the nature of the public private pay gap differs between genders and that of the gender pay gap differs between sectors. The analysis shows that essentially none of the gender earnings gap in both the public and private sector can be explained by differences in observable characteristics. Decomposition analysis further reveals that the contribution of differences in workplace characteristics to the public private earnings gap is sizeable and significant. Whilst the presence of performance related pay and company pension schemes is associated with higher relative earnings for those in the private sector, the key workplace characteristic for the public private pay gap is the presence of familyfriendly employment practices. Increased provision is associated with higher relative earnings in the public sector for both men and women.

Suggested Citation

  • Monojit Chatterji & Karen Mumford & Peter N Smith, 2007. "The Public-Private Sector Wage Differential: Gender, Workplaces and Family Friendliness," Dundee Discussion Papers in Economics 202, Economic Studies, University of Dundee.
  • Handle: RePEc:dun:dpaper:202
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    File URL: http://www.dundee.ac.uk/media/dundeewebsite/economicstudies/documents/discussion/DDPE_202.pdf
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    References listed on IDEAS

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    1. Helen Simpson, 2009. "Productivity In Public Services," Journal of Economic Surveys, Wiley Blackwell, vol. 23(2), pages 250-276, April.
    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. Chatterji, Monojit, 2008. "Training hold up and social labour markets," Labour Economics, Elsevier, vol. 15(2), pages 202-214, April.
    4. Judith Hellerstein & David Neumark & Melissa McInerney, 2008. "Changes in Workplace Segregation in the United States between 1990 and 2000: Evidence from Matched Employer-Employee Data," NBER Chapters,in: The Analysis of Firms and Employees: Quantitative and Qualitative Approaches, pages 163-195 National Bureau of Economic Research, Inc.
    5. Filipe Almeida-Santos & Karen Mumford, 2005. "Employee Training And Wage Compression In Britain," Manchester School, University of Manchester, vol. 73(3), pages 321-342, June.
    6. Erica L. Groshen, 1991. "The Structure of the Female/Male Wage Differential: Is It Who You Are, What You Do, or Where You Work?," Journal of Human Resources, University of Wisconsin Press, vol. 26(3), pages 457-472.
    7. Bhaskar, V & To, Ted, 1999. "Minimum Wages for Ronald McDonald Monopsonies: A Theory of Monopsonistic Competition," Economic Journal, Royal Economic Society, vol. 109(455), pages 190-203, April.
    8. Claudio Lucifora & Dominique Meurs, 2006. "The Public Sector Pay Gap In France, Great Britain And Italy," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 52(1), pages 43-59, March.
    9. Oaxaca, Ronald L. & Ransom, Michael R., 1994. "On discrimination and the decomposition of wage differentials," Journal of Econometrics, Elsevier, vol. 61(1), pages 5-21, March.
    10. Richard Disney & Amanda Gosling, 1998. "Does it pay to work in the public sector?," Fiscal Studies, Institute for Fiscal Studies, vol. 19(4), pages 347-374, November.
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    Cited by:

    1. Lovász, Anna, 2013. "Jobbak a nők esélyei a közszférában?. A nők és férfiak bérei közötti különbség és a foglalkozási szegregáció vizsgálata a köz- és magánszférában
      [Do women have better opportunities in the public se
      ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(7), pages 814-836.
    2. Jill Rubery, 2013. "Public sector adjustment and the threat to gender equality," Chapters,in: Public Sector Shock, chapter 2, pages 43-83 Edward Elgar Publishing.

    More about this item

    Keywords

    public sector earnings; gender; gap; family friendly; decomposition;

    JEL classification:

    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J7 - Labor and Demographic Economics - - Labor Discrimination

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