The Distribution of the German Public–Private Wage Gap

This paper provides a distributional analysis of the public–private sector wage gap in Germany from 1984 to 1996. The public sector wage distribution is generally less dispersed than the private sector wage distribution. The raw wage differential is positive for males who are at the lower tail of the male wage distribution and negative at the upper tail. In contrast, females enjoy positive wage gaps along most part of the wage distribution. A decomposition analysis reveals that the male wage premium, i.e. the part of the wage gap not accounted for by differences in observable characteristics, is uniformly negative, whereas the female wage premium is positive.