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The Public Sector Wage Premium in Spain: Evidence from Longitudinal Administrative Data

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  • Hospido, Laura

    () (Bank of Spain)

  • Moral-Benito, Enrique

    () (Bank of Spain)

Abstract

This paper studies the public sector wage gap in Spain, by gender, skill level and type of contract, using recent administrative data from tax records. We estimate wage distributions in the presence of covariates separately for men and women in the public and in the private sectors, and we take advantage of the longitudinal structure of the data to control for selection. We find a positive public wage premium for men and women even after accounting for characteristics and endogenous selection; the observed average gap in hourly wages of 35 log points is reduced to 20 when accounting for observed characteristics, and to 10 once endogenous selection is also taken into consideration. We also find substantial variation in the public premium along the wage distribution once observed characteristics are accounted for. This variation, however, is offset by opposite patterns of selection into the public sector: while we observe positive selection into the public sector at the bottom of the wage distribution, workers at the top of the distribution select negatively into the public sector.

Suggested Citation

  • Hospido, Laura & Moral-Benito, Enrique, 2014. "The Public Sector Wage Premium in Spain: Evidence from Longitudinal Administrative Data," IZA Discussion Papers 8315, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp8315
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    Cited by:

    1. Antón, José-Ignacio & Muñoz de Bustillo, Rafael, 2013. "Public-private sector wage differentials in Spain. An updated picture in the midst of the Great Recession," MPRA Paper 48897, University Library of Munich, Germany.
    2. repec:spr:izalpo:v:6:y:2017:i:1:d:10.1186_s40173-017-0086-0 is not listed on IDEAS
    3. Javier Vázquez-Grenno & Jordi Jofre-Monseny & José I. Silva, 2016. "Local labor market effects of public employment," Working Papers 2016/11, Institut d'Economia de Barcelona (IEB).
    4. Rebekka Christopoulou & Vassilis Monastiriotis, 2016. "Public-private wage duality during the Greek crisis," Oxford Economic Papers, Oxford University Press, vol. 68(1), pages 174-196.
    5. Barton, Nicholas & Bold, Tessa & Sandefur, Justin, 2017. "Measuring Rents from Public Employment: Regression discontinuity evidence from Kenya," CEPR Discussion Papers 12105, C.E.P.R. Discussion Papers.
    6. Nicholas Barton & Tessa Bold & Justin Sandefur, 2017. "Measuring Rents from Public Employment: Regression Discontinuity Evidence from Kenya - Working Paper 457," Working Papers 457, Center for Global Development.
    7. Kostas Mavromaras & Stephane Mahuteau & Kostas Mavromaras & Sue Richardson & Rong Zhu, 2017. "Public–Private Sector Wage Differentials in Australia," The Economic Record, The Economic Society of Australia, vol. 93, pages 105-121, June.
    8. Maria Manuel Campos & Domenico Depalo & Evangelia Papapetrou & Javier J. Perez & Roberto Ramos, 2016. "Understanding the public sector pay gap," Working Papers w201606, Banco de Portugal, Economics and Research Department.
    9. Raffaela Giordano & Manuel Coutinho Pereira & Domenico Depalo & Bruno Eugène & Evangelia Papapetrou & Javier J. Pérez & Lukas Reiss & Mojca Roter, 2014. "The Public Sector Pay Gap in a Selection of Euro Area Countries in the Pre-crisis Period," Hacienda Pública Española, IEF, vol. 214(3), pages 11-34, September.
    10. Maria M. Campos & Domenico Depalo & Evangelia Papapetrou & Javier J. Pérez & Roberto Ramos, 2017. "Understanding the public sector pay gap," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 6(1), pages 1-29, December.
    11. Virginia Sanchez Marcos & Ezgi Kaya & Nezih Guner, 2017. "Labor Market Frictions and Lowest Low Fertility," 2017 Meeting Papers 1015, Society for Economic Dynamics.

    More about this item

    Keywords

    public sector wage gap; quantile regression; wage distribution; panel data;

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • 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

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