Public sector pay in Finland

Monojit Chatterji, Terhi Maczulskij, Jakko Pehkonen

    Research output: Working paperDiscussion paper

    58 Downloads (Pure)

    Abstract

    This study analyses the forces determining public and private sector pay in Finland. The data used is a 7 per cent sample taken from the Finnish 2001 census. It contains information on 42 680 male workers, of which 8 759 are employed in public and 33 921 in the private sector. The study documents and describes data by education, occupation and industry. We estimate earnings equations for the whole sample as well as for four industries (construction, real estate, transportation and health) that provide an adequate mix of both public and sector workers. The results suggest that the private-public sector pay gap of about one per cent can be accounted for by differences in observable characteristics between the sectors (3.4 per cent) and lower returns from these characteristics (-2.3 per cent). However, the industry-level analysis indicates that the earnings gaps vary across industries, and are negative in some cases. These inter-industry differences in public-private gaps persist even when the usual controls are introduced. This suggests that public sector wage setters need greater local flexibility, which should result in less uniform wages within the public sector.
    Original languageEnglish
    PublisherUniversity of Dundee
    Publication statusPublished - 2008

    Publication series

    NameDundee Discussion Papers in Economics
    PublisherUniversity of Dundee
    No.213
    ISSN (Print)1473-236X

    Keywords

    • Earnings
    • Public sector
    • Private sector
    • Wage gap

    Fingerprint Dive into the research topics of 'Public sector pay in Finland'. Together they form a unique fingerprint.

  • Cite this

    Chatterji, M., Maczulskij, T., & Pehkonen, J. (2008). Public sector pay in Finland. (Dundee Discussion Papers in Economics; No. 213). University of Dundee.