Public-Private Sector Wage Differentials in Germany: Evidence from Quantile Regression

Presentation at 7eme Colloque des Jeunes Econometres, Mont Sainte Odile, 2.-4.05.2002

This paper measures the differences in earnings distributions between public sector and private sector employees in Germany in 2000. OLS results suggest that wages are lower in the public sector for men but higher for women. The use of quantile regressions indicates that the public sector wage premium is highest at the lower end of the wage distribution and then decreases monotonically as we move up the wage distribution. Separate analyses by work experience and educational groups reveal that the most experienced employees and those with basic schooling do best in the public sector.