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Public-Private Wage Differentials in Ireland, 1994-2001

Author

Listed:
  • Gerry Boyle

    () (National University of Ireland, Maynooth)

  • Rory McElligott

    (National University of Ireland, Maynooth)

  • Jim O'Leary

    (National University of Ireland, Maynooth)

Abstract

Are public sector workers in Ireland paid more than private sector employees, when such differences in productivity-related personal attributes and job characteristics are controlled for? We estimate that in 2001 the premium enjoyed by public servants was about 13 per cent. We find that the premium, is significantly bigger for those near the bottom of the earnings distribution than for those near the top, was significantly bigger for women than men in the mid-1990s but not at the end of the 1990s, and does not vary significantly across different levels of educational attainment. We estimate the premium for 2001 to be not significantly different from that estimated for 1994 despite this period a period of exceptionally rapid output and employment growth, and correspondingly sharp tightening of labour market conditions in the Irish economy. The most remarkable difference between our results and those of other researchers for other countries relates to the absolute size of the premium. A number of possible explanations for this difference are discussed.

Suggested Citation

  • Gerry Boyle & Rory McElligott & Jim O'Leary, 2004. "Public-Private Wage Differentials in Ireland, 1994-2001," Economics, Finance and Accounting Department Working Paper Series n1421004, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
  • Handle: RePEc:may:mayecw:n1421004
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    File URL: http://repec.maynoothuniversity.ie/mayecw-files/N1421004.pdf
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    References listed on IDEAS

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    1. Freeman, Richard B, 1984. "Longitudinal Analyses of the Effects of Trade Unions," Journal of Labor Economics, University of Chicago Press, vol. 2(1), pages 1-26, January.
    2. James M. Poterba & Kim S. Rueben, 1994. "The Distribution of Public Sector Wage Premia: New Evidence Using Quantile Regression Methods," NBER Working Papers 4734, National Bureau of Economic Research, Inc.
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    6. Casey, Barra, 2004. "An Economy-Wide Perspective on Earnings Data in Ireland," Quarterly Economic Commentary: Special Articles, Economic and Social Research Institute (ESRI), pages 1-22.
    7. Blaise Melly, 2005. "Public-private sector wage differentials in Germany: Evidence from quantile regression," Empirical Economics, Springer, pages 505-520.
    8. Richard Disney & Amanda Gosling, 1998. "Does it pay to work in the public sector?," Fiscal Studies, Institute for Fiscal Studies, pages 347-374.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Gorecki, Paul K., 2009. "The Recession, Budgets, Competition, and Regulation: Should the State Supply Bespoke Protection?," Papers BP2010/2, Economic and Social Research Institute (ESRI).
    2. Domenico Depalo & Raffaela Giordano & Evangelia Papapetrou, 2015. "Public–private wage differentials in euro-area countries: evidence from quantile decomposition analysis," Empirical Economics, Springer, pages 985-1015.
    3. Philip O’Connell, 2013. "Cautious adjustment in a context of economic collapse: The public sector in the Irish crises," Chapters,in: Public Sector Shock, chapter 9, pages 337-370 Edward Elgar Publishing.
    4. Callan, Tim & Nolan, Brian & Walsh, John R., 2010. "The Economic Crisis, Public Sector Pay, and the Income Distribution," IZA Discussion Papers 4948, Institute for the Study of Labor (IZA).
    5. Pérez, Javier J. & Giordano, Raffaela & Depalo, Domenico & Coutinho Pereira, Manuel & Eugène, Bruno & Papapetrou, Evangelia & Reiss, Lukas & Roter, Mojca, 2011. "The public sector pay gap in a selection of Euro area countries," Working Paper Series 1406, European Central Bank.
    6. Hospido, Laura & Moral-Benito, Enrique, 2016. "The public sector wage premium in Spain: Evidence from longitudinal administrative data," Labour Economics, Elsevier, pages 101-122.
    7. Niamh Hardiman, 2006. "Politics and Social Partnership - Flexible Network Governance," The Economic and Social Review, Economic and Social Studies, vol. 37(3), pages 343-374.
    8. Maria Manuel Campos & Mário Centeno, 2011. "Public-private wage gaps in the period prior to the adoption of the euro: an application based on longitudinal data," Economic Bulletin and Financial Stability Report Articles, Banco de Portugal, Economics and Research Department.
    9. 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), pages 1-23.
    10. repec:esr:chaptr:jacb200962 is not listed on IDEAS
    11. International Monetary Fund, 2004. "Ireland; Selected Issues," IMF Staff Country Reports 04/349, International Monetary Fund.
    12. repec:esr:wpaper:rn2012/4/2 is not listed on IDEAS
    13. 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.
    14. Kelly, Eilish & McGuinness, Seamus & O'Connell, Philip, 2009. "Benchmarking, Social Partnership and Higher Remuneration: Wage Settling Institutions and the Public-Private Sector Wage Gap in Ireland," The Economic and Social Review, Economic and Social Studies, vol. 40(3), pages 339-370.
    15. Kelly, Elish & McGuinness, Seamus & O'Connell, Philip J., 2013. "Comparing Public and Private Sector Pay in Ireland: Size Matters," Research Notes RN2012/4/2, Economic and Social Research Institute (ESRI).

    More about this item

    Keywords

    public; private; wage; differentials; Ireland;

    JEL classification:

    • 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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