Public-Private Sector Wage Differentials in Australia

21 Pages Posted: 1 May 2017

See all articles by Stephane Mahuteau

Stephane Mahuteau

Macquarie University - Economics Department

Kostas G. Mavromaras

University of Melbourne - Melbourne Institute: Applied Economic & Social Research; IZA Institute of Labor Economics

Sue Richardson

Flinders University

Rong Zhu

Flinders University

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Abstract

This paper examines wage differentials between public sector and private sector workers in Australia. After controlling for observed characteristics and individual fixed effects, we show that on average workers in the public sector earn about 5.1% percent more hourly wages than those in the private sector. The wage premium is slightly higher for females than males. Using a panel data quantile regression model with fixed effects, we show that the positive wage effects of public sector employment are heterogeneous, with comparatively larger impact at the lower end of the wage distribution than at other parts. We also find evidence of heterogeneity in the public sector wage premiums by qualification, time period, occupation and state/territory.

Keywords: public sector, private sector, wage gap

JEL Classification: J31, J45

Suggested Citation

Mahuteau, Stephane and Mavromaras, Kostas G. and Richardson, Sue and Zhu, Rong, Public-Private Sector Wage Differentials in Australia. IZA Discussion Paper No. 10719, Available at SSRN: https://ssrn.com/abstract=2960528 or http://dx.doi.org/10.2139/ssrn.2960528

Stephane Mahuteau (Contact Author)

Macquarie University - Economics Department ( email )

North Ryde
Sydney, New South Wales 2109
Australia
612 9850 8489 (Phone)
612 9850 6069 (Fax)

HOME PAGE: http://www.econ.mq.edu.au/staff/position/staff_by_position/stephane_mahuteau

Kostas G. Mavromaras

University of Melbourne - Melbourne Institute: Applied Economic & Social Research ( email )

Level 5, FBE Building, 111 Barry Street
Parkville, Victoria 3010
Australia

IZA Institute of Labor Economics

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

Sue Richardson

Flinders University ( email )

GPO Box 2100
Adelaide S.A. 5001, SA 5063
Australia

Rong Zhu

Flinders University

GPO Box 2100
Adelaide S.A. 5001, SA 5063
Australia

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