International Conference on Economics, Finance & Business, London

THE GREEK PUBLIC-PRIVATE SECTOR WAGE GAP AFTER THE CRISIS

ELISAVET NITSI, YIORGOS IOANNIDIS

Abstract:

All studies on the Greek private-public wage gap before the debt crisis found a large public premium, which persists even after controlling for individual and job characteristics of employees. Although policy measures were taken in the early years of the crisis, they only managed to partially offset it, as wage deflation spread to the private sector, maintaining the public premia for the low-wage earners. In this paper we examine the public-private sector pay gap in Greece using the 2023 Labor Force Survey. The coefficients of conditional (on personal and job characteristics) public sector controls give a first impression on wage differences, while the decomposition into explained and unexplained components allow for a more accurate estimation of the wage gap. In this case, the decomposition showed that the situation was overthrown, with a significant private premium of the Greek private-public wage differential. Separate subsample decompositions based on sex and educational level provide interesting insight regarding Greece’s pay structure.

Keywords: Public-private pay gap, Public sector, Private sector, Decompositions