The public sector pay gap in 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 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 workers. The overall gap ranges between 13–17 % for women and is 7 % or lower for men; it is much higher when possible sorting is considered. JEL classification:H50, J31, J45, J50