6533b7dafe1ef96bd126e322
RESEARCH PRODUCT
The public–private sector wage gap in Latvia
Karlis Vilertssubject
Labour economicsLabour force surveypublic sector wagesmedia_common.quotation_subjectJ88WageOaxaca-Ransom decompositionMicrodata (statistics)lcsh:K4430-4675lcsh:HD72-88lcsh:Economic growth development planningpublic-private sector wage gap0502 economics and businessEconomicsddc:330050207 economicsJ31lcsh:Public finance050205 econometrics media_commonpublic–private sector wage gapbusiness.industryJ3305 social sciencesPublic sectorPrivate sectorDouble sample selectionPolitical Science and International RelationsbusinessGeneral Economics Econometrics and Financedescription
This study investigates the public-private sector wage gap in Latvia using microdata from the labour force survey. The severity of public sector wage cuts employed as a response to the economic crisis and subsequent recovery provides a test bed to analyse whether and how the public-private sector wage gap has adjusted after consolidation-driven wage cuts. Findings reveal that the observed wage gap is slightly in favour of the public sector; however, once differences in individual characteristics and selection effects are considered, results point to a private sector wage premium. Findings also suggest that the private sector wage premium has increased since the pre-crisis period. A significant private sector wage premium raises doubts on whether a system that is reliant on discretionary fiscal measures is efficient enough in eliminating unwarranted differences in wage. In particular, whether a re-adjustment process of public sector wages works after consolidation-driven wage cuts.
| year | journal | country | edition | language |
|---|---|---|---|---|
| 2018-01-02 | Baltic Journal of Economics |