Estimation of Public–Private Wage Differentials in Turkey with Sample Correction

• Published in: Developing economies Vol. 50; no. 3; pp. 285 - 298
• Main Authors: San, Sayın, Polat, Özgür
• Format: Journal Article
• Language: English
• Published: 01.09.2012
• Subjects: Appropriations and expenditures; Consumption; Earnings; Economic development; Employment; Endowments; Household consumption; Household expenditure; Household income; Households; Income distribution; J31; J45; Oaxaca‐Blinder decomposition; Private sector; Public sector; Public-private sector cooperation; Public‐Private sectors; Quantile regression; Regression analysis; Sample correction; Surveys; Turkey; Wage differentials
• ISSN: 0012-1533; 1746-1049
• DOI: 10.1111/j.1746-1049.2012.00172.x

The aim of this study is to determine how the change in the balance between public–private sector employments affected public and private earnings during the 1990s and 2000s in Turkey. We use the Oaxaca–Blinder and quantile decomposition methods to determine the wage gap between public and private sectors utilizing the 1994 Household Income Distribution and Consumption Expenditure Survey and the 2008 Household Budget Survey conducted by the Turkish Statistical Institute. The study determined that the primary difference in the average wages between sectors arises from the differences in the endowments without correction for gender. After adjusting for correction using quantile regression, we find that the difference in the endowments between sectors at lower quantiles explains the majority of the raw wage gap; whereas a substantial amount of the raw wage gap is explained by the sector effect at higher quantiles.