[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/nbb/ecrart/y2011mdecemberiiiip21-33.html
   My bibliography  Save this article

Public sector wages

Author

Listed:
  • B. Eugène

    (National Bank of Belgium, Research Department)

Abstract
Remuneration paid by public administrations in Belgium amounted to one-quarter of their primary expenditure in 2010. Because current conditions call for fiscal consolidation, it is important to examine whether this component of spending could be a source of budget savings, including by adjusting wages. The article focuses principally on wage gaps between the public sector and the private sector. The authors are especially interested in the situation in Belgium as compared with those of nine other euro area countries (Germany, Austria, Spain, France, Greece, Italy, Ireland, Portugal and Slovenia), a study of which using microeconomic data was recently completed. In most of the countries analysed, wages are higher in the public sector than in the private sector, regardless of whether macroeconomic or microeconomic data are used. With the former, it is not possible to consider differences in the characteristics of the populations working in each of the two sectors. Indeed, the public sector – notably in Belgium – is more composed of women, older workers, and those with a higher level of education, but public sector employees work fewer hours and are less likely to occupy a managerial position. To take these factors – gender, seniority or age, education level, and managerial duties – into consideration when comparing wages between the two sectors, microeconomic data from the EU-SILC survey were used. The observations the authors were able to make based on the microeconomic and macroeconomic data overwhelmingly corroborate each other. The analysis shows that the countries where the average wage gap is the biggest in favour of the public sector are also the countries experiencing the toughest budget woes. In most of the countries studied, the salary advantage enjoyed by public sector workers holds for every sub-set of workers, although to differing extents. For example, wage gaps are the widest for women, for lower levels of income, for those who do not have supervisory functions, and in the branches of administration and education. The impact of education level on wage gaps varies from one country to the next. The wage gap between sectors in Belgium is one of the narrowest of any country studied, regardless of what data are used. According to macroeconomic data, it slightly favours the private sector. According to microeconomic data, in which wages are adjusted to control for individual characteristics, for many groups of workers the gaps are so limited that they are not statistically significant.

Suggested Citation

  • B. Eugène, 2011. "Public sector wages," Economic Review, National Bank of Belgium, issue iii, pages 21-33, December.
    • Handle: RePEc:nbb:ecrart:y:2011:m:december:i:iii:p:21-33
    as

    Download full text from publisher

    File URL: https://www.nbb.be/en/articles/public-sector-wages-1
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. P. Bisciari & B. Eugène & L. Van Meensel, 2009. "Public employment in Belgium," Economic Review, National Bank of Belgium, issue ii, pages 53-68, June.
    2. Holm-Hadulla, Fédéric & Kamath, Kishore & Lamo, Ana & Pérez, Javier J. & Schuknecht, Ludger, 2010. "Public wages in the euro area - towards securing stability and competitiveness," Occasional Paper Series 112, European Central Bank.
    3. Pérez, Javier J. & Giordano, Raffaela & Depalo, Domenico & Coutinho Pereira, Manuel & Eugène, Bruno & Papapetrou, Evangelia & Reiss, Lukas & Roter, Mojca, 2011. "The public sector pay gap in a selection of Euro area countries," Working Paper Series 1406, European Central Bank.
    4. Holm-Hadulla, Fédéric & Kamath, Kishore & Lamo, Ana & Pérez, Javier J. & Schuknecht, Ludger, 2010. "Public wages in the euro area - towards securing stability and competitiveness," Occasional Paper Series 112, European Central Bank.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fontaine, Idriss & Gálvez-Iniesta, Ismael & Gomes, Pedro & Vila-Martin, Diego, 2020. "Labour market flows: Accounting for the public sector," Labour Economics, Elsevier, vol. 62(C).
    2. Lamo, Ana & Pérez, Javier J. & Schuknecht, Ludger, 2013. "Are government wages interlinked with private sector wages?," Journal of Policy Modeling, Elsevier, vol. 35(5), pages 697-712.
    3. Maria M. Campos & Domenico Depalo & Evangelia Papapetrou & Javier J. Pérez & Roberto Ramos, 2017. "Understanding the public sector pay gap," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 6(1), pages 1-29, December.
    4. George Economides & Dimitris Papageorgiou & Apostolis Philippopoulos & Vanghelis Vassilatos, 2013. "Smaller Public Sectors in the Euro Area: Aggregate and Distributional Implications," CESifo Economic Studies, CESifo Group, vol. 59(3), pages 536-558, September.
    5. Marzinotto, Benedicta & Turrini, Alessandro, 2016. "Co-movements between Public and Private Wages in the EU: Which Factors Play a Role?," IZA Discussion Papers 9964, Institute of Labor Economics (IZA).
    6. Raffaela Giordano & Manuel Coutinho Pereira & Domenico Depalo & Bruno Eugène & Evangelia Papapetrou & Javier J. Pérez & Lukas Reiss & Mojca Roter, 2014. "The Public Sector Pay Gap in a Selection of Euro Area Countries in the Pre-crisis Period," Hacienda Pública Española / Review of Public Economics, IEF, vol. 214(3), pages 11-34, September.
    7. Benedicta Marzinotto & Alessandro Turrini, 2017. "Co-movements between public and private wages in the EU: what factors and with what policy implications?," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 6(1), pages 1-16, December.
    8. Javier J. Perez & Ana Lamo & Enrique Moral-Benito, 2015. "Does Slack Influence Public and Private Labor Market," EcoMod2015 8792, EcoMod.
    9. Guilherme Bandeira & Evi Pappa & Rana Sajedi & Eugenia Vella, 2018. "Fiscal Consolidation in a Low-Inflation Environment: Pay Cuts versus Lost Jobs," International Journal of Central Banking, International Journal of Central Banking, vol. 14(3), pages 7-52, June.
    10. A team of the Working Group on Econometric Modelling of the European System of Central Banks, 2012. "Competitiveness and external imbalances within the euro area," Occasional Paper Series 139, European Central Bank.
    11. Christian Thimann, 2015. "The Microeconomic Dimensions of the Eurozone Crisis and Why European Politics Cannot Solve Them," Journal of Economic Perspectives, American Economic Association, vol. 29(3), pages 141-164, Summer.
    12. Matteo Salto, 2016. "Fiscal Policy after the Crisis – Workshop Proceedings," European Economy - Discussion Papers 035, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    13. Gonzalo Fernández-de-Córdoba & Javier Pérez & José Torres, 2012. "Public and private sector wages interactions in a general equilibrium model," Public Choice, Springer, vol. 150(1), pages 309-326, January.
    14. Naeem Akram, 2022. "Public-Private Wage Differentials: Evidence from Pakistan," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 27(2), pages 39-64, July-Dec.
    15. Sturm, Michael & Sauter, Nicolas, 2010. "The impact of the global financial turmoil and recession on Mediterranean countries’ economies," Occasional Paper Series 118, European Central Bank.
    16. Fabien Postel-Vinay, 2015. "Does it pay to be a public-sector employee?," IZA World of Labor, Institute of Labor Economics (IZA), pages 156-156, June.
    17. Task Force of the Monetary Policy Committee of the ESCB, 2010. "Energy markets and the euro area macroeconomy," Occasional Paper Series 113, European Central Bank.
    18. Hess, Patrick, 2010. "Securities clearing and settlement in China: markets, infrastructures and policy-making," Occasional Paper Series 116, European Central Bank.
    19. Beirne, John & Tapking, Jens & Sahel, Benjamin & Sušec, Matjaž & Monar, Fernando & Manganelli, Simone & Grothe, Magdalena & Ejsing, Jacob & Dalitz, Lars & Vong, Tana, 2011. "The impact of the Eurosystem's covered bond purchase programme on the primary and secondary markets," Occasional Paper Series 122, European Central Bank.
    20. di Mauro, Filippo & Forster, Katrin & Lima, Ana, 2010. "The global downturn and its impact on euro area exports and competitiveness," Occasional Paper Series 119, European Central Bank.

    More about this item

    Keywords

    public expenditure; wages;

    JEL classification:

    • H59 - Public Economics - - National Government Expenditures and Related Policies - - - Other
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbb:ecrart:y:2011:m:december:i:iii:p:21-33. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/bnbgvbe.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.