Public-private wage differentials in Tunisia : consistency and decomposition

Abstract EN

In this paper we estimate and decompose the public-private wage differentials for both rural and urban areas, using the 2012 household survey on Tunisian youth.

Oaxaca decomposition results suggest that the average public-sector worker earns more than his/her private counterpart.

The results suggest that a substantial part of the conditional gap in urban area is actually explained and that public-sector employees in both urban and rural areas have, on average more education.

Using unconditional quantile decomposition technique proposed by Firpo et al (2009), we find that in urban area the discrimination effect contributes more to the wage differentials than the characteristics effect at the higher end of the wage distribution.

Separate analyses by gender and educational levels reveal a higher public-private sector earning gap for women.

Less educated workers are compensated much more in the public sector than in the private sector, while the wage differential for university educated workers decreases rapidly through the distribution.