Public-private wage gaps: is civil-servant human capital sector-specific?

M. Beffy and T. Kamionka
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M. Beffy: Insee
T. Kamionka: Crest

Documents de Travail de l'Insee - INSEE Working Papers from Institut National de la Statistique et des Etudes Economiques

Abstract: What would be the counterfactual wage of civil servants if they were employed in the private sector? Using the French European Household panel, we present a new approach to the wage differential between the public and the private sectors. We estimate a model, which controls both for selection into employment, and for self-selection into the public sector. We also introduce unobserved heterogeneity in the propensity to be employed in either job sector, and in the sector-specific productivity. Evidence based on the counterfactual distributions suggests a large public-private wage premium for low public wages. This conclusion also holds for women but may be explained by a weaker discrimination in the public sector. Unlike women, most male civil servants would earn more in the private sector.

Keywords: counterfactual distributions; wage differentials; public and private sector; unobserved heterogeneity (search for similar items in EconPapers)
JEL-codes: C21 C33 C35 J31 J45 J64 (search for similar items in EconPapers)
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:nse:doctra:g2010-16

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