Are Public Sector Workers Underpaid in Russia? Estimating the Public-Private Wage Gap

29 Pages Posted: 19 Jan 2009  

Vladimir Gimpelson

National Research University Higher School of Economics; IZA Institute of Labor Economics

Anna Lukiyanova

National Research University Higher School of Economics

Abstract

The paper starts with discussing institutional framework for public sector wage setting in Russia. Given that individual choice of the sector is endogenous to wages, the authors recommend alternative econometric techniques for the public-private wage gap estimation. Applying switching regression that allows correcting for non-random sector selection, the paper provides wage gap estimates for various demographic, occupational, and territorial population subgroups. As it is shown, there is significant cross-group variation in the wage gap. The paper concludes that to eliminate the negative gap wages in the public sector should be linked to the private sector wages at the regional level.

Keywords: public sector

JEL Classification: J31, J45

Suggested Citation

Gimpelson, Vladimir and Lukiyanova, Anna, Are Public Sector Workers Underpaid in Russia? Estimating the Public-Private Wage Gap. IZA Discussion Paper No. 3941. Available at SSRN: https://ssrn.com/abstract=1329579

Vladimir Gimpelson (Contact Author)

National Research University Higher School of Economics ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Anna Lukiyanova

National Research University Higher School of Economics ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

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