Publication: Wage Differentials and State-Private Sector Employment Choice in the Federal Republic of Yugoslavia
Date
2003-01
ISSN
Published
2003-01
Author(s)
Abstract
The authors use the newly available
Yugoslavian Labor Force Survey data to investigate wage
differentials and employment decisions in the state and
private sectors in Yugoslavia. For the analysis the authors
use three empirical models that rely on different
statistical assumptions. They extend the standard switching
regression model to allow non-normality in the joint
distribution of the error terms. After correcting for the
sector selection bias and controlling for workers'
characteristics the authors find a private sector wage
advantage. The wage premium is largest for workers with low
education levels and declining for workers with higher
educational levels. Given the regulatory and tax policies
that pushed the private sector into the informal sphere of
the economy during the period covered by our data, the
authors argue that the state-private wage gap is likely to
grow in the future. This will make it increasingly difficult
for the state sector to attract and retain highly skilled employees.
Citation
“Lokshin, Michael M.; Jovanovic, Branko. 2003. Wage Differentials and State-Private Sector Employment Choice in the Federal Republic of Yugoslavia. Policy Research Working Paper;No. 2959. © World Bank, Washington, DC. http://hdl.handle.net/10986/19173 License: CC BY 3.0 IGO.”
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