Generalized switching regression analysis of private and public sector wage structures in Germany

C. Dustmann, A.H.O. van Soest

Research output: Working paperDiscussion paperOther research output

301 Downloads (Pure)

Abstract

This paper analyzes wage structures in the public and the private sector for Germany. The data contains a rich set of variables on parents' characteristics that we use as instruments. We extend the empirical literature in this field by endogenizing education level and hours worked, and by using life cycle wage differentials in the structural selection equation. We show that these extentions significantly improve the standard model. Moreover, they lead to considerably different parameter estimates. We compute conditional and unconditional wage predictions for the various specifications using model simulations. We find that, on average, potential wages in the private sector exceed those in the public sector. Those actually working in the public sector, would do somewhat better in the private sector, while those working in the private sector would earn much less in the public sector.
Original languageEnglish
PublisherUnknown Publisher
Number of pages29
Volume1995-44
Publication statusPublished - 1995

Publication series

NameCentER Discussion Paper
Volume1995-44

Keywords

  • Regression Analysis
  • Public Choice
  • Wage Differentials
  • labour economics

Fingerprint Dive into the research topics of 'Generalized switching regression analysis of private and public sector wage structures in Germany'. Together they form a unique fingerprint.

  • Cite this

    Dustmann, C., & van Soest, A. H. O. (1995). Generalized switching regression analysis of private and public sector wage structures in Germany. (CentER Discussion Paper; Vol. 1995-44). Unknown Publisher.