A Detailed Decomposition Analysis of the Public-Private Sector Wage Gap in South Africa

31 Pages Posted: 4 Sep 2015

See all articles by Prudence Kwenda

Prudence Kwenda

University College Dublin (UCD)

Miracle Ntuli

University of Cape Town (UCT)

Abstract

The present study examines the public-private sector wage gap in South Africa using individual cross section data for 2000-7. Results from unconditional quantile regressions and generalised Oaxaca-Blinder type decompositions show that the wage gap is inverted-U shaped across the wage distribution. The 'composition' effect is more important than the 'price' effect at the bottom of the distribution while the opposite applies at the top. Key factors underpinning the 'composition' effect are unionisation, industry of employment and education, while those associated with the 'price' effect are education, race and occupation.

Keywords: public sector, wage gap, recentered influence function, decomposition

JEL Classification: C21, J31, J45

Suggested Citation

Kwenda, Prudence and Ntuli, Miracle, A Detailed Decomposition Analysis of the Public-Private Sector Wage Gap in South Africa. IZA Discussion Paper No. 9271, Available at SSRN: https://ssrn.com/abstract=2655311

Prudence Kwenda (Contact Author)

University College Dublin (UCD) ( email )

Belfield, Dublin 4 4
Ireland

Miracle Ntuli

University of Cape Town (UCT) ( email )

Private Bag X3
Rondebosch, Western Cape 7701
South Africa

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