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Public-private wage gaps : is civil-servant human capital sector-specific?

Author

Listed:
  • M. BEFFY

    (Insee)

  • T. KAMIONKA

    (Crest)

Abstract

What would be the counterfactual wage of civil servants if they were employed in the private sector? Using the French European Household panel, we present a new approach to the wage differential between the public and the private sectors. We estimate a model, which controls both for selection into employment, and for self-selection into the public sector. We also introduce unobserved heterogeneity in the propensity to be employed in either job sector, and in the sector-specific productivity. Evidence based on the counterfactual distributions suggests a large public-private wage premium for low public wages. This conclusion also holds for women but may be explained by a weaker discrimination in the public sector. Unlike women, most male civil servants would earn more in the private sector.

Suggested Citation

  • M. Beffy & T. Kamionka, 2010. "Public-private wage gaps : is civil-servant human capital sector-specific?," Documents de Travail de l'Insee - INSEE Working Papers g2010-16, Institut National de la Statistique et des Etudes Economiques.
    • Handle: RePEc:nse:doctra:g2010-16
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    File URL: https://www.bnsp.insee.fr/ark:/12148/bc6p06zqtf6/f1.pdf
    File Function: Document de travail de la DESE numéro G2010-16
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    More about this item

    Keywords

    counterfactual distributions; wage differentials; public and private sector; unobserved heterogeneity;
    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
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions

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