Are Public Sector Workers «Losers»? Estimation of the Public-private Wage Gap in Russia

Abstract

This paper is devoted to the public-private wage gap in Russia. Wage gap is estimated with the use both of the mean and the quantile regressions, which will provide a more complex picture of the public-private sector wage gap distribution. The author finds the existence of significant public-private wage gap (about 30%) considering both observable and unobservable characteristics of workers and jobs. Decomposition based on quantile regression helps to answer the question about the nature of the wage differences. The author comes to the conclusion that the main reason for the gap is the institutional mechanisms of public sector in Russia. The analysis is based on the data from RLMS – HSE 2000–2010.