Public-Private Sector Wage Differentials and Returns to Education in Djibouti

18 Pages Posted: 20 Apr 2016

Date Written: May 1, 2006


Do public sector workers earn a wage premium in Djibouti and are the returns to education different across the sectors? The authors estimate private and public sector wage earnings using 1996 household survey data, while controlling for selectivity using Heckman's two stage approach. They find that Djiboutian public sector employees earn a wage premium, independent of their personal attributes and human capital endowments, and are more likely to be males and have parents in the public sector. Workers in the public sector earn higher private rates of return to education than do private sector workers with post-secondary schooling. These results raise concerns about current government hiring and wage-setting practices that generate distortions in the labor market and are not efficiently allocating labor and public resources.

Keywords: Labor Markets, Public Sector Economics & Finance, Public Sector Management and Reform, Education For All, Education and Digital Divide

Suggested Citation

Seshan, Ganesh K. and Anos Casero, Paloma, Public-Private Sector Wage Differentials and Returns to Education in Djibouti (May 1, 2006). World Bank Policy Research Working Paper No. 3923, Available at SSRN:

Ganesh K. Seshan (Contact Author)

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

Paloma Anos Casero

World Bank ( email )

1818 H Street
Washington, DC Washington 20433
United States
2024371780 (Phone)

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