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The Public-Private Sector Pay Differential in Greece

University of Athens and Economic Research Department, Bank of Greece

This article examines the earnings differential between the public and private sectors pay in Greece employing quantile regression analysis and using micro data. The results suggest that average earnings are higher in the public sector than in the private sector for both genders but earnings in the public sector show a smaller dispersion with respect to the private sector. The findings indicate that employees in the public sector at the lower end of the earnings distribution earn a higher wage gap compared with their counterparts in the private sector but this gap decreases at higher quantiles. In addition, quantile regression estimation reveals that the earnings differences in the low quantiles are mainly attributed to the unobserved characteristics and partly to the differences in endowment. By contrast, in the highest quantiles the differences in earnings between sectors for both genders are mainly attributed to the observed differences in the endowment characteristics.

Key Words: wage differentials • public/private sector • quantile regression

Public Finance Review, Vol. 34, No. 4, 450-473 (2006)
DOI: 10.1177/1091142106288998


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