Publication type
Journal Article
Authors
Publication date
June 1, 2007
Abstract:
The existing literature on inequality between private and public sectors focuses on cross-section differences in earnings levels. Forward-looking agents, however, care about income and job mobility too, which we show are substantially different between the two sectors. Using data from the BHPS, we estimate a model of income and employment dynamics, allowing for unobserved heterogeneity in the propensity to be employed in either job sector. We detect a positive average public premium both in income flows and in the present discounted sum of future income flows. We also find that income inequality is lower but more persistent in the public sector.
Published in
Economic Journal
Volume
Volume: 117 (523):1460-1503
DOI
http://dx.doi.org/10.1111/j.1468-0297.2007.02091.x
Subjects
Notes
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