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Evolution of the Public-Private Sector Wage Differential during Transition in Estonia

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  • Kristjan-Olari Leping

Abstract

This article estimates the public-private sector wage differential in Estonia over the transition period. Quantile regression is used with a dataset from Estonian Labour Force Surveys from 1989 to 2004 for this purpose. The results of the analysis indicate that the public-private sector wage differential was negative during early transition but has decreased subsequently. It also shows that employees with low potential wages tend to gain more or lose less from working in the public sector than workers with high potential wages. The public-private sector wage differential is negatively related to the number of public employees and tends to be counter-cyclical. Political cycles have no effect on the public-private sector wage differential in Estonia.

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  • Kristjan-Olari Leping, 2006. "Evolution of the Public-Private Sector Wage Differential during Transition in Estonia," Post-Communist Economies, Taylor & Francis Journals, vol. 18(4), pages 419-436.
    • Handle: RePEc:taf:pocoec:v:18:y:2006:i:4:p:419-436
    DOI: 10.1080/14631370601008548
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    3. Gabriela Grotkowska & Leszek Wincenciak & Tomasz Gajderowicz, 2017. "Evolution of the Public-Sector Wage Premium in Poland," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 1, pages 5-31.
    4. Vladimir Gimpelson & Anna Lukiyanova & Anna Sharunina, 2015. "Estimating the Public-Private Wage Gap in Russia: What Does Quantile Regression Tell Us?," HSE Working papers WP BRP 104/EC/2015, National Research University Higher School of Economics.
    5. Tansel, Aysit & Keskin, Halil Ibrahim & Ozdemir, Zeynel Abidin, 2020. "Public-private sector wage gap by gender in Egypt: Evidence from quantile regression on panel data, 1998–2018," World Development, Elsevier, vol. 135(C).
    6. Ebo Botchway & Kofi Fred Asiedu, 2020. "Ownership type and earnings gap decomposition: Evidence from the Ghanaian labor market," African Development Review, African Development Bank, vol. 32(4), pages 619-631, December.
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    8. Naeem Akram, 2022. "Public-Private Wage Differentials: Evidence from Pakistan," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 27(2), pages 39-64, July-Dec.
    9. Gimpelson, Vladimir & Lukiyanova, Anna & Sharunina, Anna, 2019. "Economics and Politics of the Public-Private Wage Gap (The Case of Russia)," IZA Discussion Papers 12247, Institute of Labor Economics (IZA).
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