Public sector wage compression and wage inequality: Gender and geographic heterogeneity

Jørn Rattsø () and Hildegunn Stokke
Additional contact information
Jørn Rattsø: Department of Economics, Norwegian University of Science and Technology
Authors registered in the RePEc Author Service: Jorn Rattso

Working Paper Series from Department of Economics, Norwegian University of Science and Technology

Abstract: Studies of wage inequality concentrate on private wages. Public sector wages are typically assumed to contribute to overall wage equality. We challenge this understanding in an analysis of the relative skill premium in public versus private sectors. The analysis of heterogeneity across gender and geography is based on rich register data for Norway. The raw data confirm the relative wage compression in the public sector. However, this is a male phenomenon and only prevalent in large cities when unobserved worker and firm characteristics are taken into account. With identification based on shifters between private and public sectors and movers between city-size groups, wage setting for female workers in the public sector increases wage inequality in all regions, particularly in the periphery. The result is consistent with policies promoting recruitment of high-educated female workers and expansion of public services in the periphery counterbalancing the desired equality effect of public wages.

Keywords: Wage inequality; skill premium; geography; private-public wages (search for similar items in EconPapers)
JEL-codes: J31 J45 R23 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2022-12-20
New Economics Papers: this item is included in nep-eur, nep-geo, nep-lma and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.svt.ntnu.no/iso/WP/2022/4_22.pdf (application/pdf)

Related works:
Journal Article: Public sector wage compression and wage inequality: gender and geographic heterogeneity (2024)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nst:samfok:19522

Access Statistics for this paper

More papers in Working Paper Series from Department of Economics, Norwegian University of Science and Technology Contact information at EDIRC.
Bibliographic data for series maintained by Anne Larsen ().