The public sector wage premium puzzle
Wedi’i wahardd nes
MetadataDangos cofnod eitem llawn
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.
International Journal of Computational Economics and Econometrics;
Article accepted for publication in International Journal of Computational Economics and Econometrics
Cardiff Metropolitan University (Grant ID: Cardiff Metropolian (Internal))