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Chapter 5 Workers’ Mobility and the Return to Education, Evidence from Public and Private Sectors

In: Research in Labor Economics

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  • Yuval Mazar

Abstract

This chapter examines whether changes in return to education affect workers’ mobility between jobs. Employee panel data are used to study staff movement from the public sector to the private sector or vice versa from 1995 to 2005. It is found that in line with the situation in other advanced economies, the wage structure in the public sector in Israel is more compressed than that in the private sector, for employees with similar characteristics and in general, and that the difference widened during the period reviewed. Hence, the findings support the contention that the public sector compensates employees less for their skills than does the private sector. In addition, it is found that during that period the return to education increased in the private sector by about 1 percentage point more than in the public sector. In an analysis of those who switched from one sector to the other, our findings imply that if the return to education changed at the same rate in both sectors, the probability of highly educated workers moving from the public sector to the private sector would be 5 percent lower, and the probability of highly educated workers moving from the private sector to the public sector would be 2 percent higher.

Suggested Citation

  • Yuval Mazar, 2011. "Chapter 5 Workers’ Mobility and the Return to Education, Evidence from Public and Private Sectors," Research in Labor Economics, in: Research in Labor Economics, pages 175-208, Emerald Group Publishing Limited.
    • Handle: RePEc:eme:rleczz:s0147-9121(2011)0000033008
    DOI: 10.1108/S0147-9121(2011)0000033008
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    Cited by:

    1. Yuval Mazar, 2018. "Differences in Skill Levels of Educated Workers Between the Public and private Sectors, the Return to Skills and the Connection between them: Evidence from the PIAAC Surveys," Bank of Israel Working Papers 2018.01, Bank of Israel.
    2. Yuval Mazar, 2014. "The development of wages in the public sector and their connection with wages in the private sector," Bank of Israel Working Papers 2014.03, Bank of Israel.

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