Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/267556 
Authors: 
Year of Publication: 
2018
Citation: 
[Journal:] Baltic Journal of Economics [ISSN:] 2334-4385 [Volume:] 18 [Issue:] 1 [Publisher:] Taylor & Francis [Place:] London [Year:] 2018 [Pages:] 25-50
Publisher: 
Taylor & Francis, London
Abstract: 
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.
Subjects: 
Double sample selection
Oaxaca-Ransom decomposition
public sector wages
public-private sector wage gap
JEL: 
J31
J33
J88
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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