The Effect of Public Wages on Corporate Compensation in Hungary

Almos Telegdy

No 7524, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: I identify wage spillovers from the public to the corporate sector with the help of a large and sudden public sector wage increase, which raised real compensation by 40 percent in two years, changing the average public wage premium from minus 10 to plus 12 percent. Using a dataset covering about 7 percent of Hungarian workers and their employer, the spillover effect is identified with the variation of the share of public sector employment within groups defined by gender, experience and occupation. The analysis shows that 10 percent higher share of public sector workers within worker-type induces an additional wage growth of 15-20 percent around the wage increase. Controlling for firm (worker spell) fixed effects does not change the results qualitatively and results in a spillover effect of 11-14 (7.5-12) percent. The spillover effect is positively correlated with the public wage premium within worker type, with occupations which are abundant in the public sector, with the availability of public sector jobs and being hired after the wage increase.

Keywords: wage spillover; public sector; Hungary (search for similar items in EconPapers)
JEL-codes: J31 J45 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2013-07
New Economics Papers: this item is included in nep-eur, nep-hme, nep-lab, nep-lma, nep-spo and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://docs.iza.org/dp7524.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp7524

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().