Public–private wage differentials in euro-area countries: evidence from quantile decomposition analysis

Domenico Depalo, Raffaela Giordano () and Evangelia Papapetrou ()

Empirical Economics, 2015, vol. 49, issue 3, 985-1015

Abstract: We evaluate the public–private wage differential for men in ten euro-area countries in the period 2004–2007. Using the most recent methodologies on a Mincerian equation, we assess how much of the differential depends on differences in endowments and how much on differences in the remuneration of such skills. For the first time, we look at the contribution of specific covariates at different quantiles of the wage distribution and decompose the variance into an explained and an unexplained component. We find that the pay gap is often decreasing over the distribution and that it is mostly determined by higher endowments in the upper tail of the wage distribution and by higher returns of such endowments at the low tail, with considerable heterogeneity across countries. We further find that the wage distribution in the public sector is more compressed than in the private sector in some countries. This is the result, for all countries, of more dispersed distributions of endowments in the public sector and of returns in the private sector. Copyright Springer-Verlag Berlin Heidelberg 2015

Keywords: Public employment; Wage differentials; Wage determination (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (48)

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Working Paper: Public-private wage differentials in euro area countries: evidence from quantile decomposition analysis (2013)
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DOI: 10.1007/s00181-014-0900-0

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