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Public–Private Wage Differentials: Evidence from The Netherlands

Author

Listed:
  • Cindy Biesenbeek

    (De Nederlandsche Bank)

  • Siemen Werff

    (SEO Economisch Onderzoek)

Abstract

This study analyzes public–private wage differentials in The Netherlands between 2006 and 2017. We use OLS and simultaneous quantile regression models to compare gross hourly wages of employees at different quantiles of the wage distribution. Our study adds to the body of literature explaining public–private wage differentials because it is one of the first studies that looks at public–private wage differentials before, during and after the financial crisis. We find public–private wage differentials in favor of the public sector for low-wage employees and in favor of the private sector for high-wage employees in all research years. Public sector wages deteriorated substantially for all quantiles between 2011 and 2014, when public sector wages were officially frozen due to budgetary constraints. From 2015 onwards, public sector wages more than caught up with those in the private sector. In 2017, wages for the median employee were higher in the public sector, contrary to previous years.

Suggested Citation

  • Cindy Biesenbeek & Siemen Werff, 2019. "Public–Private Wage Differentials: Evidence from The Netherlands," De Economist, Springer, vol. 167(1), pages 23-43, March.
    • Handle: RePEc:kap:decono:v:167:y:2019:i:1:d:10.1007_s10645-019-09335-z
    DOI: 10.1007/s10645-019-09335-z
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    References listed on IDEAS

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    5. Louis Christofides & Maria Michael, 2013. "Exploring the public-private sector wage gap in European countries," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-53, December.
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    9. Holm-Hadulla, Fédéric & Kamath, Kishore & Lamo, Ana & Pérez, Javier J. & Schuknecht, Ludger, 2010. "Public wages in the euro area - towards securing stability and competitiveness," Occasional Paper Series 112, European Central Bank.
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    Cited by:

    1. Andreas Wörgötter & Sihle Nomdebevana, 2020. "Aggregate Public-Private Remuneration Patterns in South Africa," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 48(4), pages 461-474, December.
    2. Cindy Biesenbeek & Maikel Volkerink, 2023. "The Price of Flexible Jobs: Wage Differentials between Permanent and Flexible Jobs in the Netherlands," De Economist, Springer, vol. 171(4), pages 367-401, December.

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    More about this item

    Keywords

    Earnings; Hourly wages; Public sector; Public–private wage differential; Quantile regression; Wage differentials; Wage distribution; Wage gap;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets

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