 Public sector wage compression and wage inequality: gender and geographic heterogeneityJørn Rattsø and Hildegunn Stokke Oxford Economic Papers, 2024, vol. 76, issue 3, 722-740 Abstract: Studies of wage inequality concentrate on private wages. Public sector wages are typically assumed to contribute to the overall wage equality. We challenge this understanding in an analysis of the relative skill premium in the 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 the recruitment of high-educated female workers and the expansion of public services in the periphery counterbalancing the desired equality effect of public wages. JEL-codes: J31 J45 R23 (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:oup:oxecpp:v:76:y:2024:i:3:p:722-740. Ordering information: This journal article can be ordered from Access Statistics for this article Oxford Economic Papers is currently edited by James Forder and Francis J. Teal More articles in Oxford Economic Papers from Oxford University Press Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK. |
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