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

Domenico Depalo, Raffaela Giordano () and Evangelia Papapetrou ()
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Evangelia Papapetrou: Bank of Greece

No 907, Temi di discussione (Economic working papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: We evaluate the public-private wage differential in ten euro area countries for men in the period 2004-2007. Using the most recent methodologies on a Mincerian equation, we assess how much of the pay differential between public and private sector workers 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 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 but not in all countries. This is the results, for all countries, of more dispersed distributions of endowments in the public sector and of returns in the private sector.

Keywords: public employment; wage differentials; wage determination. (search for similar items in EconPapers)
JEL-codes: H50 J31 J45 J50 (search for similar items in EconPapers)
Date: 2013-04
New Economics Papers: this item is included in nep-eec, nep-eur, nep-lab, nep-lma and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

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Related works:
Journal Article: Public–private wage differentials in euro-area countries: evidence from quantile decomposition analysis (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:bdi:wptemi:td_907_13

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