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Examining Equality between Public‐ and Private‐Sector Wage Distributions
Author(s) -
Bender Keith A.
Publication year - 2003
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1093/ei/41.1.62
Subject(s) - wage , comparability , unobservable , economics , distribution (mathematics) , differential (mechanical device) , variance (accounting) , public sector , private sector , labour economics , efficiency wage , compensating differential , econometrics , wage share , mathematics , economy , mathematical analysis , accounting , combinatorics , economic growth , engineering , aerospace engineering
Most comparability studies examine average pay differences, but this article explores differences in the distribution of public‐ and private‐sector wages. Applying a new type of decomposition method, the results indicate that the difference in average wages is only a small part of wage incomparability, whereas differences in the variance of the differential are a much more important factor explaining incomparability. Further results find that differences in wage structure and unobservable factors determining wages have distinct effects in different parts of the wage distribution.