Does it pay to go public? Understanding the public-private sector wage gap in Germany

Marina Bonaccolto-Töpfer, Carolina Castagnetti and Stephanie Prümer

No 116, Discussion Papers from Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics

Abstract: Using data from the German Socio-Economic Panel 1984-2017, this paper provides first evidence on the public-private sector wage gap in Germany based on a fixed effect quantile approach. The results reveal substantial differences in the decomposition of the gap compared to the standard cross-sectional approach. We find that women earn more in public employment, while men are penalized. Our analysis suggests that this penalization is not related to compensating wage differentials. Against the background of demographic change, the public sector may face difficulties to recruit (skilled) men and may need to adjust its pay schemes to fair and merit-based ones.

Keywords: Public-Private Sector Wage Gap; Quantile Regression for Panel Data; Germany (search for similar items in EconPapers)
JEL-codes: C33 J31 J45 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-eur and nep-lma
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:faulre:116

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