- Public and private sector wages in the Netherlands
- European Economic Review
- Volume | Issue number
- 37 | 1
- Number of pages
- Document type
- Faculty of Economics and Business (FEB)
- Amsterdam School of Economics Research Institute (ASE-RI)
There is much debate in the Netherlands about underpayment of public-sector workers relative to private-sector workers. In this paper, the authors analyze the wage structures in both sectors using an endogenous switching regression model. Unlike previous Dutch studies, the authors find that the earnings prospects of public-sector workers are better in the public sector than in the private sector. For private-sector workers they find the exact opposite; their earnings prospects are better in the private sector. Moreover, the allocation over sectors points to comparative advantages.
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