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The Distribution of Public Sector Wage Premia: New Evidence Using Quantile Regression Methods

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Author Info
James M. Poterba
Kim S. Rueben

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Abstract

This paper documents the changing pattern of wage differentials between state and local government employees and their private sector counterparts during the 1979-1992 period. While the relative wages of women employed in the two sectors changed very little during this period, the relative wages of men employed in the state and local sector rose nearly 8%. There is substantial heterogeneity in the changes in relative wages of public and private sector employees during the 1980s. For highly educated workers, private sector wages rose significantly faster than public sector wages, while for those with at most a high school education, the public sector wage premium increased. We present both least squares and quantile regression estimates of the public sector premium. While the level of this premium is sensitive to our choice of quantile, the change in the premium, and the estimated pattern across skill levels, is not substantially affected by varying the quantile.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 4734.

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Date of creation: May 1994
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Handle: RePEc:nbr:nberwo:4734

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Find related papers by JEL classification:
H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets

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  1. William J. Moore & Robert J. Newman, 1991. "Government wage differentials in a municipal labor market: The case of Houston Metropolitan Transit workers," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 45(1), pages 145-153, October.
  2. Lawrence F. Katz & Alan B. Krueger, 1991. "Changes in the Structure of Wages in the Public and Private Sectors," NBER Working Papers 3667, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  3. Murphy, Kevin M & Welch, Finis, 1992. "The Structure of Wages," The Quarterly Journal of Economics, MIT Press, vol. 107(1), pages 285-326, February. [Downloadable!] (restricted)
  4. Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, vol. 46(1), pages 33-50, January. [Downloadable!] (restricted)
  5. Joskow, Paul L. & Rose, Nancy L. & Shepard, Andrea., 1993. "Regulatory constraints on executive compensation," Working papers 3550-93., Massachusetts Institute of Technology (MIT), Sloan School of Management. [Downloadable!]
  6. Ronald G. Ehrenberg & Joshua L. Schwarz, 1987. "Public Sector Labor Markets," NBER Working Papers 1179, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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