PUBLIC AND PRIVATE SECTOR WAGE DIFFERENTIALS: EMPIRICAL EVIDENCE FROM TÜRKİYE
PUBLIC AND PRIVATE SECTOR WAGE DIFFERENTIALS: EMPIRICAL EVIDENCE FROM TÜRKİYE

Summary/Abstract: Using microdata from the 2015 and 2022 Household Labor Force Survey, this study assesses public-private sector wage differentials in Türkiye. By presenting descriptive statistics, kernel density estimates, cumulative distribution functions, OLS regressions, Oaxaca-Blinder decompositions, and unconditional quantile approach through a sequence of methods, the analysis describes the average and distributional patterns in the wage disparities. Findings show a persistent wage advantage for those in the public sector, but the gap narrows over time. A large portion of the differential has been explained by observable features like education, occupational type, and geographic location, and the factor linked to sector-specific returns decline by 2022. There is some distributional evidence that suggests broad-spectrum heterogeneity along the wage scale: in 2015, the public sector premiums are largest around mid and the upper quantiles, but by 2022 they become more moderate and more evenly distributed. These changes indicate that there has been some convergence between the public and private sectors on rewarding worker characteristics and are indicative of changing wage-setting dynamics during this period. The results provide new insights in Türkiye about the development of wage structures, as well as the need to pay attention to the relationship between worker characteristics and their resulting returns in the distribution leading to wage gap analysis for labour-market policy decisions and public-sector compensation structuring.

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