Are Public Sector Workers Underpaid? Appropriate Comparators in a Developing Country
How is public sector compensation best aligned with the market? In industrial countries a common reference is the salary paid by private employers for similar jobs (the "jobs approach"). But comparable jobs are formal, and in developing c...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2001/12/1662737/public-sector-workers-underpaid-appropriate-comparators-developing-country http://hdl.handle.net/10986/19338 |
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okr-10986-193382021-04-23T14:03:42Z Are Public Sector Workers Underpaid? Appropriate Comparators in a Developing Country Bales, Sarah Rama, Martin WORKERS' COMPENSATION PUBLIC SECTOR WAGES COMPARATIVE ECONOMICS DEVELOPING COUNTRIES LABOR MARKETS PUBLIC SECTOR MANAGEMENT EMPLOYMENT & INCOME FORMAL SECTOR INFORMAL SECTOR ECONOMETRIC MODELS STATE-OWNED ENTERPRISES POLITICAL BIAS DOWNSIZING OF ORGANIZATIONS COMMUNITY CHARACTERISTICS DATA ANALYSIS DATA SETS DEPENDENT VARIABLE DEVELOPING COUNTRIES DEVELOPING COUNTRY DISTRIBUTION FUNCTIONS ECONOMETRIC ANALYSIS ECONOMETRIC ISSUES ECONOMETRIC MODEL EDUCATIONAL ATTAINMENT EFFICIENT PUBLIC SECTOR DOWNSIZING EMPIRICAL ANALYSIS EMPLOYMENT EMPLOYMENT STATUS EXPENDITURES EXPLANATORY VARIABLES FAMILIES FOREIGN COMPANIES GEOGRAPHICAL AREA HEALTH PROGRAMS HOUSEHOLD CHARACTERISTICS HOUSEHOLD CONSUMPTION HOUSEHOLD DATA HOUSEHOLD QUESTIONNAIRE HOUSEHOLD SURVEY HUMAN DEVELOPMENT INCOME INCOME TRANSFER INCOMES INFORMAL ACTIVITIES INFORMAL SECTOR INFORMAL SECTOR EMPLOYMENT INTERNATIONAL STANDARDS JOB SEPARATION LABOR FORCE LABOR FORCE PARTICIPATION LABOR MARKET LABOR MARKET REGULATIONS LABOR PRODUCTIVITY LIVING STANDARDS LIVING STANDARDS MEASUREMENT LOCAL LEVEL MARKET ECONOMY MODEL ESTIMATION MOTIVATION NORMAL DISTRIBUTION NUTRITION POLICY MAKERS POLICY MEASURES POLICY RESEARCH POSITIVE VALUE PRIVATE SECTOR PRIVATE SECTOR EARNINGS PRIVATE SECTOR WORKERS PRIVATE SECTORS PUBLIC SECTOR PUBLIC SECTOR COMPENSATION PUBLIC SECTOR REFORM PUBLIC SERVICES RANDOM EFFECTS REFORM PROGRAM REFORM PROGRAMS REGIONAL DUMMIES REGIONAL LEVEL REPRESENTATIVE SURVEY RETIREMENT RURAL AREAS SAMPLE SELECTION SECTOR EMPLOYMENT SELECTION BIAS SKILLED WORKER SOCIAL PROTECTION STATE-OWNED ENTERPRISES STATISTICAL OFFICE TRANSITION COUNTRIES UNIVERSITY GRADUATES URBAN AREAS VOCATIONAL TRAINING WATER SUPPLY WORKERS YOUNG WORKERS How is public sector compensation best aligned with the market? In industrial countries a common reference is the salary paid by private employers for similar jobs (the "jobs approach"). But comparable jobs are formal, and in developing countries the relevant alternative for many public sector workers is informal sector employment. Another approach uses as a reference, the earnings of similar workers in the private sector, regardless of whether their jobs are formal, or informal (the "workers approach"). A potential shortcoming of this approach is that workers may differ in characteristics that are unobservable. The authors assess the importance of this shortcoming, by relying on five econometric methods, four of which correct the bias from unobservable characteristics. The authors focus on state-owned enterprises in Vietnam, which recruited workers on the basis of political loyalty, and other unobservable characteristics. A massive downsizing program, which led to the departure of the most entrepreneurial workers, may have exacerbated the selection bias. However, all the results obtained with the workers approach, fall within a relatively narrow range. They suggest that workers in state-owned enterprises, are overpaid by twenty percent, or more. In contrast, the jobs approach indicates that they could earn two, to six times more in the private sector. 2014-08-14T21:10:19Z 2014-08-14T21:10:19Z 2001-12 http://documents.worldbank.org/curated/en/2001/12/1662737/public-sector-workers-underpaid-appropriate-comparators-developing-country http://hdl.handle.net/10986/19338 English en_US Policy Research Working Paper;No. 2747 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research East Asia and Pacific Vietnam |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
WORKERS' COMPENSATION PUBLIC SECTOR WAGES COMPARATIVE ECONOMICS DEVELOPING COUNTRIES LABOR MARKETS PUBLIC SECTOR MANAGEMENT EMPLOYMENT & INCOME FORMAL SECTOR INFORMAL SECTOR ECONOMETRIC MODELS STATE-OWNED ENTERPRISES POLITICAL BIAS DOWNSIZING OF ORGANIZATIONS COMMUNITY CHARACTERISTICS DATA ANALYSIS DATA SETS DEPENDENT VARIABLE DEVELOPING COUNTRIES DEVELOPING COUNTRY DISTRIBUTION FUNCTIONS ECONOMETRIC ANALYSIS ECONOMETRIC ISSUES ECONOMETRIC MODEL EDUCATIONAL ATTAINMENT EFFICIENT PUBLIC SECTOR DOWNSIZING EMPIRICAL ANALYSIS EMPLOYMENT EMPLOYMENT STATUS EXPENDITURES EXPLANATORY VARIABLES FAMILIES FOREIGN COMPANIES GEOGRAPHICAL AREA HEALTH PROGRAMS HOUSEHOLD CHARACTERISTICS HOUSEHOLD CONSUMPTION HOUSEHOLD DATA HOUSEHOLD QUESTIONNAIRE HOUSEHOLD SURVEY HUMAN DEVELOPMENT INCOME INCOME TRANSFER INCOMES INFORMAL ACTIVITIES INFORMAL SECTOR INFORMAL SECTOR EMPLOYMENT INTERNATIONAL STANDARDS JOB SEPARATION LABOR FORCE LABOR FORCE PARTICIPATION LABOR MARKET LABOR MARKET REGULATIONS LABOR PRODUCTIVITY LIVING STANDARDS LIVING STANDARDS MEASUREMENT LOCAL LEVEL MARKET ECONOMY MODEL ESTIMATION MOTIVATION NORMAL DISTRIBUTION NUTRITION POLICY MAKERS POLICY MEASURES POLICY RESEARCH POSITIVE VALUE PRIVATE SECTOR PRIVATE SECTOR EARNINGS PRIVATE SECTOR WORKERS PRIVATE SECTORS PUBLIC SECTOR PUBLIC SECTOR COMPENSATION PUBLIC SECTOR REFORM PUBLIC SERVICES RANDOM EFFECTS REFORM PROGRAM REFORM PROGRAMS REGIONAL DUMMIES REGIONAL LEVEL REPRESENTATIVE SURVEY RETIREMENT RURAL AREAS SAMPLE SELECTION SECTOR EMPLOYMENT SELECTION BIAS SKILLED WORKER SOCIAL PROTECTION STATE-OWNED ENTERPRISES STATISTICAL OFFICE TRANSITION COUNTRIES UNIVERSITY GRADUATES URBAN AREAS VOCATIONAL TRAINING WATER SUPPLY WORKERS YOUNG WORKERS |
| spellingShingle |
WORKERS' COMPENSATION PUBLIC SECTOR WAGES COMPARATIVE ECONOMICS DEVELOPING COUNTRIES LABOR MARKETS PUBLIC SECTOR MANAGEMENT EMPLOYMENT & INCOME FORMAL SECTOR INFORMAL SECTOR ECONOMETRIC MODELS STATE-OWNED ENTERPRISES POLITICAL BIAS DOWNSIZING OF ORGANIZATIONS COMMUNITY CHARACTERISTICS DATA ANALYSIS DATA SETS DEPENDENT VARIABLE DEVELOPING COUNTRIES DEVELOPING COUNTRY DISTRIBUTION FUNCTIONS ECONOMETRIC ANALYSIS ECONOMETRIC ISSUES ECONOMETRIC MODEL EDUCATIONAL ATTAINMENT EFFICIENT PUBLIC SECTOR DOWNSIZING EMPIRICAL ANALYSIS EMPLOYMENT EMPLOYMENT STATUS EXPENDITURES EXPLANATORY VARIABLES FAMILIES FOREIGN COMPANIES GEOGRAPHICAL AREA HEALTH PROGRAMS HOUSEHOLD CHARACTERISTICS HOUSEHOLD CONSUMPTION HOUSEHOLD DATA HOUSEHOLD QUESTIONNAIRE HOUSEHOLD SURVEY HUMAN DEVELOPMENT INCOME INCOME TRANSFER INCOMES INFORMAL ACTIVITIES INFORMAL SECTOR INFORMAL SECTOR EMPLOYMENT INTERNATIONAL STANDARDS JOB SEPARATION LABOR FORCE LABOR FORCE PARTICIPATION LABOR MARKET LABOR MARKET REGULATIONS LABOR PRODUCTIVITY LIVING STANDARDS LIVING STANDARDS MEASUREMENT LOCAL LEVEL MARKET ECONOMY MODEL ESTIMATION MOTIVATION NORMAL DISTRIBUTION NUTRITION POLICY MAKERS POLICY MEASURES POLICY RESEARCH POSITIVE VALUE PRIVATE SECTOR PRIVATE SECTOR EARNINGS PRIVATE SECTOR WORKERS PRIVATE SECTORS PUBLIC SECTOR PUBLIC SECTOR COMPENSATION PUBLIC SECTOR REFORM PUBLIC SERVICES RANDOM EFFECTS REFORM PROGRAM REFORM PROGRAMS REGIONAL DUMMIES REGIONAL LEVEL REPRESENTATIVE SURVEY RETIREMENT RURAL AREAS SAMPLE SELECTION SECTOR EMPLOYMENT SELECTION BIAS SKILLED WORKER SOCIAL PROTECTION STATE-OWNED ENTERPRISES STATISTICAL OFFICE TRANSITION COUNTRIES UNIVERSITY GRADUATES URBAN AREAS VOCATIONAL TRAINING WATER SUPPLY WORKERS YOUNG WORKERS Bales, Sarah Rama, Martin Are Public Sector Workers Underpaid? Appropriate Comparators in a Developing Country |
| geographic_facet |
East Asia and Pacific Vietnam |
| relation |
Policy Research Working Paper;No. 2747 |
| description |
How is public sector compensation best
aligned with the market? In industrial countries a common
reference is the salary paid by private employers for
similar jobs (the "jobs approach"). But comparable
jobs are formal, and in developing countries the relevant
alternative for many public sector workers is informal
sector employment. Another approach uses as a reference, the
earnings of similar workers in the private sector,
regardless of whether their jobs are formal, or informal
(the "workers approach"). A potential shortcoming
of this approach is that workers may differ in
characteristics that are unobservable. The authors assess
the importance of this shortcoming, by relying on five
econometric methods, four of which correct the bias from
unobservable characteristics. The authors focus on
state-owned enterprises in Vietnam, which recruited workers
on the basis of political loyalty, and other unobservable
characteristics. A massive downsizing program, which led to
the departure of the most entrepreneurial workers, may have
exacerbated the selection bias. However, all the results
obtained with the workers approach, fall within a relatively
narrow range. They suggest that workers in state-owned
enterprises, are overpaid by twenty percent, or more. In
contrast, the jobs approach indicates that they could earn
two, to six times more in the private sector. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Bales, Sarah Rama, Martin |
| author_facet |
Bales, Sarah Rama, Martin |
| author_sort |
Bales, Sarah |
| title |
Are Public Sector Workers Underpaid? Appropriate Comparators in a Developing Country |
| title_short |
Are Public Sector Workers Underpaid? Appropriate Comparators in a Developing Country |
| title_full |
Are Public Sector Workers Underpaid? Appropriate Comparators in a Developing Country |
| title_fullStr |
Are Public Sector Workers Underpaid? Appropriate Comparators in a Developing Country |
| title_full_unstemmed |
Are Public Sector Workers Underpaid? Appropriate Comparators in a Developing Country |
| title_sort |
are public sector workers underpaid? appropriate comparators in a developing country |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2001/12/1662737/public-sector-workers-underpaid-appropriate-comparators-developing-country http://hdl.handle.net/10986/19338 |
| _version_ |
1764439757922762752 |