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Does it pay to go public? Understanding the public-private sector wage gap in Germany

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  • Bonaccolto-Töpfer, Marina
  • Castagnetti, Carolina
  • Prümer, Stephanie

Abstract

Using data from the German Socio-Economic Panel 1984-2017, this paper provides first evidence on the public-private sector wage gap in Germany based on a fixed effect quantile approach. The results reveal substantial differences in the decomposition of the gap compared to the standard cross-sectional approach. We find that women earn more in public employment, while men are penalized. Our analysis suggests that this penalization is not related to compensating wage differentials. Against the background of demographic change, the public sector may face difficulties to recruit (skilled) men and may need to adjust its pay schemes to fair and merit-based ones.

Suggested Citation

  • Bonaccolto-Töpfer, Marina & Castagnetti, Carolina & Prümer, Stephanie, 2021. "Does it pay to go public? Understanding the public-private sector wage gap in Germany," Discussion Papers 116, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
    • Handle: RePEc:zbw:faulre:116
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    Cited by:

    1. Bonaccolto-Töpfer, Marina & Castagnetti, Carolina, 2021. "The COVID-19 pandemic: A threat to higher education?," Discussion Papers 117, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.

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    More about this item

    Keywords

    Public-Private Sector Wage Gap; Quantile Regression for Panel Data; Germany;
    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
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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