Understanding the gender wage gap differential between public and private sector in Italy: A quantile approach for panel data

Carolina Castagnetti and Maria Letizia Giorgetti ()
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Maria Letizia Giorgetti: Department of Economics, Management and Quantitative Methods, University of Milano

No 162, DEM Working Papers Series from University of Pavia, Department of Economics and Management

Abstract: This paper analyzes the gender wage gaps across the wage distribution in both the private and public sectors in Italy for the years 2005-2010. We use quantile regression methods to estimate and decompose the gender wage gap at different points of the wage distribution. We find in both sectors a consistent level of gender wage gap (lower in the public sector) and an increasing path along the wage distribution. Counterfactual decomposition analysis supports the idea of a sticky floor mechanism in action in the private sector and of a glass ceiling in the public sector. In addition to standard decomposition techniques we propose a two step procedure that relies on a novel approach to estimating fixed effects quantile regressions. Its main advantage is that it allows the estimation of the marginal effect of the employment sector on wages at different points of the distribution, while accounting for both observable and time-invariant unobservable factors. When we control for employees’ observed and unobservable individual characteristics, the main finding is that the gender wage gap substantially decreases in both sectors. A second evidence is that the sticky floor effect in the private sector vanishes, while the glass ceiling effect in the public sector remains. The evidence from the longitudinal analysis amplifies the differences of the wage-setting mechanisms in the two sectors.

Keywords: Gender wage gap; quantile regression for panel; public-private wage differential (search for similar items in EconPapers)
JEL-codes: J3 J45 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2018-06
New Economics Papers: this item is included in nep-eur, nep-gen, nep-knm and nep-lma
References: View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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