Are We Better Off Working in the Public Sector?

Yi Wang*, Peng Zhou

*Corresponding author for this work

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

2 Citations (Scopus)

Abstract

This paper critically reviews the literature on public sector wage premium, especially in the developed countries like the USA and the UK. It is found that the pay advantage is persistent over the latest half century, but it started to decline since the late-1990s; in particular, females tend to enjoy a higher wage premium than males. A key technical problem of estimating wage premium is selection bias, because the sector choice is endogenously determined by individual characteristics and job attributes. The main prevailing methods in the current literature are categorised into four main types, and a sample dataset from the Labour Force Survey (UK) in the latest decade is used to apply and compare these methods. The findings suggest that Blinder–Oaxaca and OLS seem to underestimate the wage premium by 2 %, compared to propensity score matching method.

Original languageEnglish
Title of host publicationAdvances in Applied Economic Research - Proceedings of the 2016 International Conference on Applied Economics ICOAE
EditorsNicholas Tsounis, Aspasia Vlachvei
PublisherSpringer Science and Business Media B.V.
Pages379-409
Number of pages31
ISBN (Print)9783319484532
DOIs
Publication statusPublished - 8 Jun 2017
EventInternational Conference on Applied Economics, ICOAE 2016 - Nicosia, Cyprus
Duration: 7 Jul 20169 Jul 2016

Publication series

NameSpringer Proceedings in Business and Economics
ISSN (Print)2198-7246
ISSN (Electronic)2198-7254

Conference

ConferenceInternational Conference on Applied Economics, ICOAE 2016
Country/TerritoryCyprus
CityNicosia
Period7/07/169/07/16

Keywords

  • Decomposition
  • Propensity score matching
  • Public sector wage premium
  • Treatment effect

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