a raw wage gap of 20 points and an unexplained wage gap of about six points on average in favour of the public sector which is not explained by differences in productivity or selection. The main results can be summarised as follows. Notes: The reported wage gaps are the sum of the unexplained and selectivity components in the Oaxaca Blinder decompositions of mincerian wage equations, as explained in Couceiro de León and Dolado (2023). Table 1 Public-private wage gap (whole sample and subsamples) Unexplained hourly wage gaps obtained from Oaxaca-Blinder decompositions applied to the estimated mincerian wage equations considered in the paper are reported, once a wide array of demographics and selection correction terms (identified by maternity and paternity leaves) are controlled for. Using detailed microdata from three waves of the Wage Structure Survey (EES, 2010, 2014, 2018), our main findings appear in Table 1. The questions we address are whether the recovery phase since 2014 and the effects of the labour market reforms implemented in 20 have brought relevant changes in the regularities uncovered during the previous decade. At any rate, outflows to unemployment and inactivity are much lower in the public than in the private sector (Fontaine et al. Note that fixed-term contracts are concentrated in provincial and town councils which use interim hiring intensively in education and health due to fiscal adjustments since the Great Recession. As regards labour contract types, temporary contracts are more prominent in the public sector (31.7% versus 18.6%) while the opposite holds for part-time work (9.0% versus 17%). Both figures point to a much higher job stability in the public sector which may lead to a greater proportion of women enjoying maternity leaves in that sector (despite being older on average). Further differences are related to age and job tenure: on average 34% of public sector employees are above 50 years of age versus 20% in the private sector, while tenure is about five years longer. (2021) argue that public employment is skewed towards high-skilled labour because governments seeking to get better inputs for the production of public goods and services use this type of labour since it is relatively less costly when public wages are compressed along the skills distribution. Another salient difference is the greater fraction of high-skilled individuals in the public sector (30% have a college or even higher degree versus 17% in the private sector), which also translates into a higher weight of upper occupations: 42% versus 32%. 
This is possibly due to self-selection of women willing to reconcile work and family.
In line with other countries, the first relevant feature is the overrepresentation of women in the Spanish public sector: 55% of public employees are females against 41% in the private sector. In a recent paper (Couceiro de León and Dolado 2023), we extend this evidence up to 2018 before the arrival of the pandemic. However, their study focuses on the 2000-2012 period which precedes the end of the sovereign debt crisis and the subsequent recovery of the Spanish economy after 2014. Spain is no exception to these empirical regularities, as documented by Hospido and Moral-Benito (2016). Accordingly, wages in both sectors may diverge for multiple reasons, among which differences in workers´ socioeconomic characteristics and preferences, recruitment rules, non-competitive wage setting, employers´ objectives, and union strength stand out.įor example, two stylised facts in most developed countries are the greater compression of public-sector wages across levels of education (typically less-skilled public employees´ pay is higher than in the private sector, while the opposite holds among high-skilled employees), and the existence of different wage gaps by gender (Winten-Ebmer et al.
Why do wages differ in the public and private sectors? A useful starting point to address this question is to acknowledge that jobs in these two sectors differ in both the nature of the performed tasks (since the public sector is the only provider of certain goods and services) and their working conditions (Garibaldi and Gomes 2020).
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