{
  "title": "Public-Private Wage Differentials and Interactions Across Countries and Time",
  "publication": "IMF Working Papers, March 17, 2023",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2023/03/17/public-private-wage-differentials-and-interactions-across-countries-and-time-531080",
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  "summary": "We compile a novel database on average public and private sector wages and public-private wage differentials, which we use to analyze how average public-private wage differentials vary according to gender and skill level as well as over time.",
  "sections": [
    {
      "heading": "Dataset and scope",
      "content": "- Compiled a novel database on average public and private sector wages and public-private wage differentials.\n- Analysis covers variation by gender, skill level, over time, and the dynamic relationship between public and private wage levels and implications for inflation."
    },
    {
      "heading": "Key empirical findings",
      "content": "- On average, public-sector workers earn around 10 percent more relative to comparable private sector workers.\n- The public sector wage premium is higher for:\n  - women\n  - low-skilled workers\n  - developing countries\n- The average public sector wage premium varies counter-cyclically:\n  - increases during economic downturns\n  - increases prior to elections\n- Both private sector wages and inflation respond positively to changes in public wages.\n- There is significant heterogeneity in the effects across countries, reflecting differences in labor market characteristics and prevailing macroeconomic conditions."
    },
    {
      "heading": "Analytical emphasis and themes",
      "content": "- Comparative analysis by gender and skill level to document differential premiums.\n- Time-series analysis to identify cyclical and political-cycle patterns (economic downturns and pre-election periods).\n- Examination of dynamic interactions between public wages, private wages, and inflation."
    },
    {
      "heading": "Implications for policymakers",
      "content": "- Public wage setting can have spillovers to private sector wages and to inflation.\n- Heterogeneous country effects imply policy responses should account for:\n  - labor market characteristics\n  - prevailing macroeconomic conditions\n  - distributional impacts across gender and skill groups\n\nSource: Public-Private Wage Differentials and Interactions Across Countries and Time, Chadi Abdallah, David Coady, La-Bhus Fah Jirasavetakul, March 17, 2023.\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2023/03/17/public-private-wage-differentials-and-interactions-across-countries-and-time-531080"
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    "[Markdown version](/en/publications/wp/issues/2023/03/17/public-private-wage-differentials-and-interactions-across-countries-and-time-531080/index.md)",
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    "Authors: Chadi Abdallah, David Coady, La-Bhus Fah Jirasavetakul",
    "Published: March 17, 2023",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9798400236853.001",
    "Compiled a novel database on average public and private sector wages and public-private wage differentials.",
    "Analysis covers variation by gender, skill level, over time, and the dynamic relationship between public and private wage levels and implications for inflation.",
    "On average, public-sector workers earn around 10 percent more relative to comparable private sector workers.",
    "The public sector wage premium is higher for:",
    "The average public sector wage premium varies counter-cyclically:",
    "Both private sector wages and inflation respond positively to changes in public wages.",
    "There is significant heterogeneity in the effects across countries, reflecting differences in labor market characteristics and prevailing macroeconomic conditions.",
    "Comparative analysis by gender and skill level to document differential premiums.",
    "Time-series analysis to identify cyclical and political-cycle patterns (economic downturns and pre-election periods).",
    "Examination of dynamic interactions between public wages, private wages, and inflation.",
    "Public wage setting can have spillovers to private sector wages and to inflation.",
    "Heterogeneous country effects imply policy responses should account for:",
    "**Working Paper**"
  ],
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