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The public sector pay gap in Italy

Domenico Depalo, Raffaela Giordano
Bank of Italy, Italy

This paper investigates the public-private sector pay gap using Italian micro data, covering the period 1998-2008. We study the entire conditional distribution of wage, through quantile regression, controlling for the possible sorting of individual between one sector or the other. The evidence shows the existence of a positive wage differential for public sector workers, even after controlling for observable characteristics, over all in the southern regions, for women and for low skill. The overall gap changes with quantiles, but ranges between 13--16% for women and 6% or lower for men and much higher when possible sorting is considered.

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