The Impact of Educational Attainment on Gross Wages: A Comparative Analysis of the Public and Private Sectors in Czechia

Abstract

This research paper examines the impact of educational attainment on gross wages in the public and private sectors in Czechia, focusing on potential disparities in wage outcomes. Using a comprehensive dataset from the Average Earnings Information System (ISPV) for 2022, we employ regression analysis, while controlling for factors such as age and gender. Our empirical analysis uncovers a positive relationship between educational attainment and wages in both the public and private sectors. However, it is noteworthy that the private sector demonstrates a slightly lower return to education compared to the public sector, as indicated by one specific regression technique employed in our study. However, the second estimation technique does not confirm this result. Additionally, we estimate a stronger negative impact of gender (female) on wage levels in the private sector than in the public sector. Analyzing wage differentials among young workers (aged 24-30) compared to the overall workforce, we observe that the disparities in average earnings are mostly less pronounced at the early stages of their careers. This research deepens our understanding of the relationship between educational attainment, wages, and sectoral differences, providing a foundation for evidence-based decision-making and policy formulation in the context of the Czech labor market.