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We examine the Greek public-private wage differential before the debt crisis to evaluate the prospective impact of the recent public sector pay cuts. We find a large public premium which persists after controlling for individual and job characteristics. For men, much of this is accounted for by self-selection into the sector that rewards better their characteristics, while for women it is largely driven by sectoral differences in returns. We attribute these effects to more egalitarian pay structures in the public sector and to demand problems in the private sector. The recent policy measures only partially change this situation, as wage deflation extends to the private sector, preserving public premia for the low paid.

Objective-An extensive literature uses reconstructed historical smoking rates by birth-cohort to inform anti-smoking policies. This paper examines whether and how these rates change when one adjusts for differential mortality of smokers and non-smokers. Dynamics, 1986Dynamics, , 1999Dynamics, , 2001Dynamics, , 2003Dynamics, , 2005, the UK (British Household Panel Survey, 1999, 2002, and Russia (Russian Longitudinal Monitoring Study, 2000), we generate life-course smoking prevalence rates by age-cohort. With cause-specific death rates from secondary sources and an improved method, we correct for differential mortality, and we test whether adjusted and unadjusted rates statistically differ. With US data (National Health Interview Survey, 1967-2004, we also compare contemporaneously measured smoking prevalence rates with the equivalent rates from retrospective data. Methods-Using retrospectively reported data from the US (Panel Study of IncomeResults-We find that differential mortality matters only for men. For Russian men over age 70 and US and UK men over age 80 unadjusted smoking prevalence understates the true prevalence. Results using retrospective and contemporaneous data are similar.Conclusions-Differential mortality bias affects our understanding of smoking habits of old cohorts and, therefore, of inter-generational patterns of smoking. Unless one focuses on the young, policy recommendations based on unadjusted smoking rates may be misleading.

During the recent crisis, Greece experienced a severe contraction and rapid transformation in its labour relations and pay-setting system in both the private and public sectors. Although the quantity (employment) adjustments that followed have been well documented, the changes that were triggered in the wage structures of the two sectors remain largely unexplored. In this paper we examine these changes using Greek Labour Force Survey micro-data. We find a differential adjustment across sectors in terms of magnitude, timing, and structure. Despite general perceptions, adjustment in public sector wages has been slow and limited, with pre-crisis premia persisting throughout the period. Instead, the private sector recorded substantial adjustment, changing noticeably its valuation of worker and job characteristics and emerging from the crisis with a structure of returns that rewards more intensively marketable skills. This may be an important feature in the prospective recovery of the Greek economy.JEL Codes: J31, J45, J58, C31, C34, H12

In 2010 all ECB publications feature a motif taken from the €500 banknote. 1 This paper is part of the Wage Dynamic Network (WDN) research. We are very grateful to David Autor, Christian Dustman, Hervé Le Bihan, Thomas Lemieux, Frank Smets, participants at the June 2008 WDN Conference and the 2009 AEA meetings and an anonymous referee for their useful comments and suggestions We also thank our WDN colleagues for their support and cooperation. Support from DG-Statistic (ECB) and Frank Smets was essential to gain access to five of the SES data sets used in the paper. We are grateful to Andrew McCallum for initial help with the data. We would also like to thank Eurostat for the hospitality and the National Statistical Institutes of each one of the countries studied in this paper for granting us with the SES data access and assisting with clarifications. Opinions expressed in this article do not necessarily reflect the views of the Banco de España. Errors and omissions are responsibility of the authors.