The Public Sector Pay Gap in France, Great Britain and Italy

17 Pages Posted: 8 May 2006

See all articles by Claudio Lucifora

Claudio Lucifora

Università Cattolica del Sacro Cuore di Milano ; IZA Institute of Labor Economics

Dominique Meurs

University of Paris II Pantheon-Assas - ERMES

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Abstract

We investigate public-private pay determination using French, British and Italian microdata. While traditional methods focus on parametric methods to estimate the public sector pay gap, in this paper, we use both non-parametric (kernel) and quantile regression methods to analyze the distribution of wages across sectors. We show that the public-private (hourly) wage differential is sensitive to the choice of quantile and that the pattern of premia varies with both gender and skill. In all countries the public sector is found to pay more to low skilled workers with respect to the private sector, whilst the reverse is true for high skilled workers. When comparing results across countries, we find that where pay formation is more regulated (i.e. as in France and Italy) the public sector pay gap is smaller; whilst where market factors play a larger role in pay determination (i.e. as in Great Britain) the public sector pay gap is larger - particularly in the lower part of the wage distribution - and females are much better off in the public sector as compared to the private sector.

Suggested Citation

Lucifora, Claudio and Meurs, Dominique, The Public Sector Pay Gap in France, Great Britain and Italy. Review of Income and Wealth, Vol. 52, No. 1, pp. 43-59, March 2006. Available at SSRN: https://ssrn.com/abstract=886827 or http://dx.doi.org/10.1111/j.1475-4991.2006.00175.x

Claudio Lucifora (Contact Author)

Università Cattolica del Sacro Cuore di Milano ( email )

Department of Economics and Finance
Largo Gemelli, 1
20123 Milano
Italy
+39 027 234 2525 (Phone)
+39 027 234 2781 (Fax)

IZA Institute of Labor Economics

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

Dominique Meurs

University of Paris II Pantheon-Assas - ERMES ( email )

12 Place du Panthéon
Paris, Cedex 5, 75005
France

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