Premium
The G reek Public Sector Wage Premium before the Crisis: Size, Selection and Relative Valuation of Characteristics
Author(s) -
Christopoulou Rebekka,
Monastiriotis Vassilis
Publication year - 2014
Publication title -
british journal of industrial relations
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.665
H-Index - 70
eISSN - 1467-8543
pISSN - 0007-1080
DOI - 10.1111/bjir.12023
Subject(s) - public sector , wage , private sector , economics , valuation (finance) , deflation , differential (mechanical device) , labour economics , monetary economics , monetary policy , finance , economy , engineering , aerospace engineering , economic growth
Abstract We examine the G reek public–private wage differential before the debt crisis to evaluate the prospective impact of the recent public sector pay cuts. We find a large public premium which persists after controlling for individual and job characteristics. For men, much of this is accounted for by self‐selection into the sector that rewards better their characteristics, while for women it is largely driven by sectoral differences in returns. We attribute these effects to more egalitarian pay structures in the public sector and to demand problems in the private sector. The recent policy measures only partially change this situation, as wage deflation extends to the private sector, preserving public premia for the low paid.