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Public-private wage dierentials and the distribution of skills across sectors
| Content Provider | Semantic Scholar |
|---|---|
| Author | Depalo, Domenico Papapetrou, Evangelia |
| Copyright Year | 2014 |
| Abstract | The extensive literature on public-private wage dierentials points to the existence, especially at the low tail of the wage distribution, of a pay gap in favor of the public sector whose size varies signicantly across countries. In this paper we provide a rst attempt to investigate the implications of public-private wage dierentials for the distribution of skills among these two sectors: if more favourable conditions in the public sector lessened the incentives of especially productive employees to work in the private sector, a negative selection among those working in the private sector could take place. In particular, we evaluate whether both formal skills and new measures of informal capabilities of the worker are correlated with his sector of employment, and what direction and magnitude this correlation has. Moreover, building on the results of a previous paper, we investigate whether a dierent remuneration of skills in public and private sectors aect the correlation. We cannot reject the hypothesis that larger wage dierentials in favour of the public sector refrain especially productive employees from working in the private sector. These ndings could have impact on labour market eciency and macroeconomic outcomes, including competitiveness. JEL classication: H50, J31, J45. |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | http://ec.europa.eu/economy_finance/events/2013/20131211_ecfin_workshop/pdf/public-private_wage_differentials_and_competitiveness-is_there_a_link_en.pdf |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
