Public-private wage differential in a post-transition economy: A copula approach to the switching regression model

Gabriela Grotkowska (), Leszek Wincenciak and Tomasz Gajderowicz

No 2016-19, Working Papers from Faculty of Economic Sciences, University of Warsaw

Abstract: In this study, we estimate the public sector wage premium in a post-transition economy, a quarter of a century since the collapse of the old regime. Our methodology uses a copula method to estimate the switching regression model, which allows for the relaxation of the restrictive assumption of joint normality. We control for employment selection into both sectors using an instrument based on information regarding learned professions. We use data from the Polish Survey of Earnings by Occupations (2012). Contrary to earlier results for Poland, we found positive selection into employment in both sectors, with positive ATET and negative ATEU. The results suggest that both private and public sector employees select themselves into the sector in which they earn more than they would in a counterfactual scenario.

Keywords: public sector; private sector; wage differentials; switching regression (search for similar items in EconPapers)
JEL-codes: J31 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2016
New Economics Papers: this item is included in nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:war:wpaper:2016-19

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