Wage premium in the state sector and state‐owned enterprises: Econometric evidence from a transition country in times of austerity

Abstract

This paper investigates the differences in the wage premium and compliance with the wage cut introduced in Serbia at the end of 2014, between two subsectors of the public sector: the state sector and state-owned enterprises. Results show that before the austerity measures were introduced, the conditional wage premium was, on average, higher in state-owned enterprises than in the state sector, with significant differences from the median to the top of the wage distribution. After the austerity measures were introduced, the wage differences between the subsectors deepened, due to lower compliance of state-owned enterprises with the wage cut. K E Y W O R D S austerity, conditional and unconditional quantile regression, public sector, state sector, state-owned enterprises, wage differential J E L C L A S S I F I C A T I O N J31, J45, J38 346 | VLADISAVLJEVIĆ

The Effects of Austerity Measures on Gender Gaps in Labor Market Outcomes

“…Recent evidence for Serbia has suggested that, following the 2015 wage cut, the publicsector wage premium dropped more in the state sector than in state-owned enterprises (Vladisavljević & Nojković, 2018). The lower compliance of state-owned enterprises (vs. the state sector) may be explained by their reduced fiscal discipline and inefficient spending, together with their access to revenues that can partially finance wages (IMF, 2015).…”