A Distributional Analysis of Public–Private Wage Differential in India

In this paper, we examine public–private wage differential among men in India across the entire wage distribution. We find that the raw wage gap between public and private sector is positive across the entire wage distribution in both urban and rural areas. A quantile regression‐based decomposition reveals that that the public sector workers enjoy a positive wage premium across the entire wage distribution in both urban and rural areas, although the magnitude of wage premium is smaller at the top quantiles.     

Public Sector Wage Premium in Canada: Evidence from Labour Force Survey

Although previous research has pointed to a public/private sector wage gap for men and women in Canada, the extent of this gap has not been measured in recent years. Using data from the Canadian Labour Force Survey for September 2008, and using an endogenous switching regression framework to control for self‐selection, I find that both men and women earn a wage premium in the public sector in Canada, although the premium is higher for women. The pure wage premium or economic rent that public sector workers receive relative to their counterparts in the private sector is $1.09, or 5.4 per cent for men and $3.15, or 20 per cent for women. An analysis of selection in the pubic/private sector reveals that public sectors workers are ‘positively selected’ on observables and consist of the ‘cream of the crop’.     

A New Look at the Public Wage Premium in Italy: The Role of Schooling Endogeneity

This paper uses a sample of male workers to estimate public and private wage structures and the public wage premium for Italy. Results from a model with endogenous sector and schooling suggest that public employees have on average lower unobserved wage potentials in both sectors than private employees, but work in the sector where they benefit from a comparative wage advantage. Schooling is positively correlated with wages in both sectors, and controlling for that is crucial to get more reliable estimates and predictions. The associated average unconditional public wage premium is 12 per cent. The net premium is 9 per cent, but not statistically significant.     

Why Do People from Southern Italy Seek Jobs in the Public Sector?

This paper analyses the choice open to a worker seeking a job in the public and private sectors of the labour market. The private sector is identified by a steeper wage profile and by lower job security than the public sector. The reservation wage for the two sectors is calculated in the first part of the paper. The results reveal that the reservation wage for the public sector is higher than that for the private sector. The effect of career prospects, job riskiness and labour demand on optimal time allocation between the search in the two sectors is then analysed. Finally, an empirical analysis is made in order to study Italian workers’ search strategies. It highlights relevant geographical differences which can be interpreted through the theoretical results obtained in the paper.     

The Motherhood Wage Penalty and Its Determinants: A Public–Private Comparison

We investigate whether public and private sector employees bear a different wage penalty for having children. According to our estimates, the total motherhood wage penalty is much larger in the private than in the public sector. Nevertheless, in both sectors, we find no unexplained penalty once we control for potential determinants of the family pay gap, namely, a reduced labour supply of mothers, child‐related career interruptions, less access to management positions, and adjustments in working conditions. Finally, only child‐related career interruptions play a different role in explaining the motherhood wage penalty in each sector.     

Decomposing the Male/Female Wage Gap: Within and Between Establishment Differences

ABSTRACT: Using Norwegian data from interviews with about 3,500 employees in 759 establishments, the male-female wage differential is decomposed into its between and within establishment components. In the private sector, the gross wage differential of 23 percent is reduced to 13 by checking for human capital and job characteristics, and to 8 by (also) checking for industry and establishment affiliation. Only this within-establishment differential will be affected by equal pay and comparable worth legislation. In the public sector the gross wage gap between men and women is smaller (17 percent). The inter-establishment component is very small, probably due to centralized wage setting and standardized pay schemes. This has not, however, affected the within-establishment differential which is as large as in the private sector.     

The Structure of Wages by Firm Size: A Comparison of Canada and the USA

Cross‐country comparisons of the skill premium between USA and Canada show differences in the returns to higher education between the two countries since the 1980s. This paper analyses whether such differences could be related to differences in skill distribution and worker sorting across firm size between the two countries. Estimation of the wage structure by size for male non‐unionized workers in the private sector reveals that selectivity effects on wages are present and similar in both countries. There are significant and substantial cross‐country differences in the returns to education among large firms, especially for younger workers.     

Wage Linkages Between Private and Public Sectors in Sweden

Abstract. The paper examines wage linkages between private and public sectors in Sweden by means of Granger causality tests and estimation of error correction models. Wage changes in central and local governments are Granger caused by private sector wage changes. Public sector wage increases involve error correction mechanisms; the lower the relative wage in the past, the higher the current wage increases. Increases in unemployment are associated with relative wage improvements for public sector employees.     

Profit Sharing and the Firm‐Size Wage Premium

This study analyzes the relationships among wages, firm size, and profit sharing schemes. We develop a simple theoretical model and explore the relationship empirically using high‐quality panel data. The theoretical model shows that the firm‐size wage premium decreases in the presence of profit sharing. The empirical results based on rich matched employee‐employer data for private sector wage earners in Finland show that the firm‐size wage premium is modest, and it becomes negligible when we account for profit sharing and covariates describing assortative matching and monopsony behavior. The analysis suggests that profit sharing schemes embody effects of firm‐specific unobservables that raise productivity, support rent sharing, and boost wages.     

PhD Graduates with Post‐doctoral Qualification in the Private Sector: Does It Pay Off?

Abstract. In this paper, we address the question of the early careers of French PhD graduates in science and engineering sciences in 1996. Post‐doctoral training was initially developed for PhD graduates wishing to embark on a career in the public sector. However, a large proportion of post‐doctorate graduates turn to the private sector, and in particular to occupations that do not involve research. The question we raise is that of the wage premium on post‐doctoral training. To control for selection bias arising in the case where unobservable elements are correlated between participation and wages, we first estimate a treatment effect model. The main finding is that when selection bias is not controlled for, post‐doctoral participation increases earnings; however, when selection bias is controlled for, the participation in a post‐doctoral programme has no positive effect. With regards to this finding we show that post‐doctoral programmes play much more the role of a signal in the first stage of a career. This finding is also reinforced when we use a bivariate selection rule to control for the endogenous nature of having been recruited in the private sector.     

Decentralized Public Sector Wage Determination: Wage Curve and Wage Comparison for Norwegian Teachers in the Pre‐WW2 Period

The recent trend towards decentralization of European public sector wage determination relaxes some of the central administered wage setting mechanisms developed in the post‐WW2 period. This paper discusses teacher wage determination in Norway in 1905–39, a period with a highly decentralized public sector wage formation. Separate wage equations for urban and rural areas are estimated. I find that the responsiveness to unemployment of the urban wage was of the same magnitude as in the post‐WW2 period private sector wage formation. In addition, the internal teacher labour market and local economic conditions influence the wage level. The rural wage mainly followed the urban wage.     

Does the Public Sector Lead the Wage Evolution in the French Economy?

Has the wage policy of the State in the French public sector (government services and State owned enterprises) had a leading effect on wages in the private sector up until the early 1980s? This paper firstly aims at verifying the existence and analysing the causes of this leading effect. The second aim is to estimate the scope of the changes which took place from the early 1980s. It shows that the wage policy of the State did influence disinflation in the 1980s and early 1990s. Indeed, it not only slowed down the growth of wages in the public sector but, by this means, it also influenced indireclty the growth of wages in the private sector.     

The Gender Wage Gap in the Turkish Labor Market

Abstract. This paper examines the sources of the gender wage gap in the Turkish labor market by using matched employer–employee data and the standard wage regression estimations as well as the Oaxaca decomposition method. The extensive number of variables in the data set enables a thorough quantitative analysis of the role of various individual‐ as well as firm‐related factors leading to wage differentials between men and women, namely human capital endowments including job tenure, occupational and industrial segregation, private/public sector location, coverage of the workplace under collective labor bargaining, and firm size. It also examines the extent of gender‐based industry and occupational segregation within the confines of data set and computes the Duncan & Duncan segregation index. We find that a large portion of the gender wage gap is attributable to women's considerably lower levels of work experience and job tenure. Other important variables that lead to pay differentials are women's lower concentration in jobs covered by collective labor bargaining and a substantial degree of occupational and industrial segregation. The differential rates of return to many of the wage determinant variables are also found to be significant in the formation of the gender wage gap.     

Labour Policy and Determinants of Employment and Wages in a Developing Economy with Labour Shortage

Using data from a sample of 1,099 workers, this paper investigates the determinants of employment and wages for workers in the United Arab Emirates. The paper further examines the wage distribution and the decomposition of the wage gap between the public and the private sectors. Results of the study are consistent with the dual labour market theory and indicate that the labour market in the United Arab Emirates is segmented based on sectors (public versus private) and types of workers (nationals versus non‐nationals). The study concludes with a discussion of the implication of these findings for the effectiveness of labour and economic policy.     

Is There a Motherhood Wage Penalty in the Finnish Private Sector?

This paper investigates the effects of children on women's wages in the Finnish private sector. The paper finds evidence of the motherhood wage penalty, the penalty varying with the length of the child‐related career break. Mothers staying at home no longer than for 2 years face considerably smaller penalties than mothers spending longer periods at home. The negative wage effects of children decrease, however, quickly with time. For example, mothers who experience a career break of 2 years or less do not lag behind non‐mothers in terms of wages after the second year from the return to employment. There is also variation in the motherhood wage penalty across the wage distribution. The penalty is higher at the top of the distribution than in the middle of it, especially in the cases of prolonged child‐related career breaks.     

The Early‐career Gender Wage Gap among University Graduates in the Finnish Private Sector

In the Finnish private sector, the gender wage gap increases significantly during the first 10 years after labour market entry, accounting for most of the lifetime increase in the gender wage differentials. This paper investigates the reasons for this gender difference in early‐career wage development. By focusing on university graduates the paper considers several explanations based on the human capital theory, job mobility, and labour market segregation. The results suggest that only about 20–26 per cent of the average early‐career gender wage gap is explained by gender differences in experience, the field of education, employer characteristics, and mobility. A substantial unexplained gap thus remains. Of the investigated factors gender differences in the field of education and work experience matter most.     

Public-Private Wage Differentials in French-Speaking Africa: A Comparative Analysis

Abstract. In the framework of structural adjustment programs implemented in Africa, the idea that wages in the public sector are too high compared to those of the private sector is partly based on wage policies with regard to the public sector. But the existence of public-wage differentials, inducing a labour market segmentation within the modern sector, has rarely been the object of attentive examination. With the help of earnings functions, based on homogeneous cross-section and logitudinal data of seven capitals of French-speaking Africa, the author plans to verify this hypothesis. The main conclusion of this research is that distortions on the modern labour market of many African countries are less important than one may think. In most of the countries considered, public-private wage gaps are essentially attributable to characteristics of individuals. This suggests that policies aiming to reduce wages of the public sector are no longer justifiable, economically and socially.     

Strike Outcomes and Wage Settlements in Spain

Abstract. This paper analyses collective bargaining using Spanish firm‐level data. Central to the analysis are the joint determination of wage and strike outcomes in a dynamic framework and the possibility of separate wage equation for strike and non‐strike outcomes. Conditional to strikes taking place, we confirm a negative relationship between strike duration and wage changes in a dynamic context. In this sense, the joint effect of the strike variables is positive for short strikes and negative for long ones (above 20 days). Furthermore, we find selection in wage equations induced by the strike outcome. In this sense, the possibility of wage determination processes being different in strike and non‐strike samples is not rejected by the data. In particular, wage dynamics are of opposite sign in both strike and non‐strike equations. Finally, we find evidence of a 0.33 percentage points wage change strike premium.     

The Male–Female Wage Gap and the Firm Effect: The Case of Young Italian Workers

Abstract. The idea that wages are determined by firm and individual characteristics suggests that there is a firm effect that influences wage differentials. This paper presents the results of an empirical analysis of gender wage differentials — based on INPS data for people between the ages of 20 and 25 employed in the private sector in 1996 — which takes into account the characteristics of workers and firms using a two‐level random‐effects model. Firm variables proved to be significant, and the proportion of females in the firm showed a negative effect on the wages of both men and women.