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Differential Patterns between Private and Public Sector Wages in Spain

Author

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  • de León, Alba Couceiro

    (Universidad Carlos III de Madrid)

  • Dolado, Juan J.

    (Universidad Carlos III de Madrid)

Abstract

This paper studies the wage differentials between the public and private sectors in Spain, as well as its distribution across different educational levels and by gender. To do so, the well-known Oaxaca-Blinder decomposition of mincerian wage regressions is applied for both sectors, breaking down the (public-private) wage gap into a component explained by differences in characteristics and another one capturing differences in returns to those characteristics. Data is drawn from the Wage Structure Survey by INE for 2010, 2014 and 2018. The main findings are: (i) strong wage compression by skills for all workers, and (ii) a female wage premium in the private sector. Both empirical results are rationalised by means of a monopoly-union wage model with monopsonistic features and female statistical discrimination.

Suggested Citation

  • de León, Alba Couceiro & Dolado, Juan J., 2022. "Differential Patterns between Private and Public Sector Wages in Spain," IZA Discussion Papers 15079, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp15079
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    Keywords

    public-private wage gap; private sector; public sector; 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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