The public sector wage premium puzzle

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Author
Wang, Yi
Zhou, Peng
Date
2019-05-18Acceptance date
2017-09-29
Type
Article
Publisher
Inderscience
ISSN
1757-1170
1757-1189 (online)
Metadata
Show full item recordAbstract
This paper investigates the public sector wage premium in the UK over the
first
decade
of the 21
st
century
using both econometric and economic modelling methods. A com-
prehensive literature review is conducted to summarise the four popular types of meth-
ods adopted by the traditional
microeconometric studies. Application of these methods
results in an estimated
public sector wage premium equal to 6.5%
. Indirect inference is
then introduced as a new method of testing and estimating a microfounded economic
model. All four types of econometric methods can be
used as auxiliary models to sum-
marise the data features, based on which the distance between the actual data and the
model
-simulated data is assessed. The selection bias can also be tested in a straightfor-
ward way under indirect inference.
Journal/conference proceeding
International Journal of Computational Economics and Econometrics;
Citation
Wang, Y. and Zhou, P. (2019) 'The public sector wage premium puzzle', International Journal of Computational Economics and Econometrics, 9(4). DOI: 10.1504/IJCEE.2019.10021464.
Description
Article published in International Journal of Computational Economics and Econometrics on 18 May 2019 (online), available at: https://doi.org/10.1504/IJCEE.2019.10021464.
Sponsorship
Cardiff Metropolitan University (Grant ID: Cardiff Metropolian (Internal))