Are We Better Off Working in the Public Sector?

Yi Wang () and Peng Zhou
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Yi Wang: Cardiff School of Management, Cardiff Metropolitan University

Chapter Chapter 28 in Advances in Applied Economic Research, 2017, pp 379-409 from Springer

Abstract: Abstract This paper critically reviews the literature on public sector wage premium, especially in the developed countries like the USA and the UK. It is found that the pay advantage is persistent over the latest half century, but it started to decline since the late-1990s; in particular, females tend to enjoy a higher wage premium than males. A key technical problem of estimating wage premium is selection bias, because the sector choice is endogenously determined by individual characteristics and job attributes. The main prevailing methods in the current literature are categorised into four main types, and a sample dataset from the Labour Force Survey (UK) in the latest decade is used to apply and compare these methods. The findings suggest that Blinder–Oaxaca and OLS seem to underestimate the wage premium by 2 %, compared to propensity score matching method.

Keywords: Public sector wage premium; Decomposition; Treatment effect; Propensity score matching (search for similar items in EconPapers)
JEL-codes: C21 C35 J31 J45 (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-3-319-48454-9_28

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DOI: 10.1007/978-3-319-48454-9_28

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