Working Paper: CEPR ID: DP3787
Authors: Richard F. Disney; Amanda Gosling
Abstract: This Paper looks at public sector pay in Britain. We present a novel instrument that exploits the variation in public sector status across individuals arising from the privatisation programme of the 1990s. We show formally that results that are estimated may thereby be robust to self-selection and measurement error, both of which are important and which bias cross-sectional estimates. Our results suggest that women in the public sector earn more then they could elsewhere, whilst, on average, men do not.
Keywords: measurement error; pay determination; selection effects
JEL Codes: J31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| public sector wage differentials (J45) | wage premium for women (J31) |
| public sector wage differentials (J45) | wage premium for men (J31) |
| selection (Y60) | public sector pay penalty for college-educated men (J45) |
| longitudinal estimates (C51) | consistent results for women (J16) |
| public sector employment (J45) | wage gain for men with no formal qualifications (J31) |
| public sector status due to privatization (L33) | public sector wage differentials (J45) |