Gap between Public and Private Wages and Wages Determination in the Public Sector

MARCONI, NELSON

doi:10.1590/0101-31572004-1626

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Brazilian Journal of Political Economy

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Articles • Brazil. J. Polit. Econ. 24 (2) • Apr-Jun 2004 • https://doi.org/10.1590/0101-31572004-1626 copy

Gap between Public and Private Wages and Wages Determination in the Public Sector

Diferença entre salários públicos e privados e fixação de salários no setor público

Authorship SCIMAGO INSTITUTIONS RANKINGS

ABSTRACT

This study verifies, first of all, the existence of segmentation between the public and private labour markets in Brazil by means of the analysis of the behaviour of employment and wages in those markets during the 1990’s, showing that the con- trolled wage gap between the workers of both sectors have increased in a manner favourable to civil servants in this period. Later on, the study analyses the factors that specifically influence the wage setting in the public sector, which would account for the existence of such gap, by means of a theoretical discussion followed by the application of econometric tests.

KEYWORDS:
Wage differentials; public sector labor markets; public and private wages

Number of employees (in thousands)								Index (1993 = 100)			% participation in total of employees
					1993	1996	1999	1993	1996	1999	1993	1996	1999
PRIVATE					18,613	20,227	21,173	100	109	114	73	75	76
PUBLIC					6,930	6,925	6,853	100	100	99	27	26	25
	Federal				1,392	1,373	1,224	100	99	88	6	5	4
		SGCS + Military			845	877	801	100	104	95	3	3	3
			SGCS		603	602	525	100	100	87	2	2	2
				Military	242	275	275	100	114	114	1	1	1
		EGCLA			547	495	423	100	91	77	2	2	2
	State				3,245	3,102	2,898	100	96	89	13	11	10
		SGCS			2,068	2,156	2,105	100	104	102	8	8	8
		EGCLA			1,177	946	793	100	80	67	5	4	3
Municipality					2,292	2,449	2,730	100	107	119	9	9	10
		SGCS			930	1,187	1,418	100	128	153	4	4	5
		EGCLA			1,361	1,262	1,311	100	93	96	5	5	5
	Total SGCS				3,601	3,945	4,049	100	110	112	14	15	14
	Total EGCLA				3,086	2,703	2,528	100	88	82	12	10	9
Total Military					242	275	275	100	114	114	1	1	1
Grand total					25,543	27,152	28,027	100	106	110	100	100	100

Amount							Index (1993 = 100)			Public / private gross wage gap (in %)
				1993	1996	1999	1993	1996	1999	1993	1996	1999
PRIVATE				454	562	527	100	124	116
PUBLIC				816	1.001	990	100	123	121	80	78	88
	Federal			1.44	1.512	1.598	100	105	111	217	169	203
		SGCS + Military		1.304	1.565	1.705	100	120	131	187	178	223
			SGCS	1.511	1.764	2.014	100	117	133	233	214	282
			Military	762	1.08	1.069	100	142	140	68	92	103
		EGCLA		1.656	1.412	1.400	100	85	85	264	151	166
State				783	1.029	1.038	100	131	132	72	83	97
		SGCS		777	1.041	1.082	100	134	139	71	85	105
		EGCLA		795	1.001	925	100	126	116	75	78	75
Municipality				395	607	598	100	154	151	-13	8	13
		SGCS		480	690	661	100	144	138	6	23	25
		EGCLA		333	527	528	100	158	158	-27	-6	0
Total SGCS				846	1.074	1.083	100	127	128	86	91	105
Total EGCLA				785	880	829	100	112	106	73	56	57
Total Military				762	1.080	1.069	100	142	140	68	92	103

				1993	1996	1999
PRIVATE
PUBLIC				7	8	16
	Federal			51	45	56
		SGCS + Military		41	50	65
			SGCS	54	61	76
			Military	14	29	47
		EGCLA		71	40	44
State				8	8	17
		SGCS		2	7	16
		EGCLA		16	12	19
Municipality				-13	-7	1
		SGCS		-10	-4	1
		EGCLA		-17	-10	1
Total SGCS				7	10	17
Total EGCLA				9	6	14
Total Military				14	29	47

(Federal + Military) / Private				State / Private			Municipality / Private
	1993	1996	1999	1993	1996	1999	1993	1996	1999
0-4 years	78	92	131	32	33	30	-10	-10	-3 ***
5-8 years	32	50	78	16	10	23	-9	-3-	2 , *
9-11 years	37	48	54	3	8	20 *	-8	-3	2 , *
12 or more	28	31	48	-21	-12	-4 ***	-27	-13	-12
General	41	50	65	2	7	16	-10	-4	1 ***

	Regression A (taking into account the ratio between transfers and revenue)	Regression B (taking into account the available revenue)
Constant	33	33
Gender	40	39
Colour	10	10
Trade-union membership	15	16
Age	2,8	2,8
Age ^ 2	-0,02	-0,02
Years of Study	12	12
Years of Experience	1	1
Per capita GDP	0,227	0,226
% voters in families of civil servants / total voters	0,2	0,21
Net transfers / (Tax Revenue + Social-Security Contributions)	0,048
Available revenue / GDP		0,102

	Statute-governed civil servants	Private Sector workers
Constant	63	22
Gender	41	37
Colour	17	29
Trade-union membership	21	24
Age	2,4	7,3
Age ^ 2	-0,02	-0,07
Years of Study	12	11
Years of Experience	0,8	2,0

Centro de Economia Política Rua Araripina, 106, CEP 05603-030 São Paulo - SP, Tel. (55 11) 3816-6053 - São Paulo - SP - Brazil
E-mail: cecilia.heise@bjpe.org.br

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[TFN1] SGCS - Statute-governed civil servants

[TFN2] EGCLA - Employees governed by the Consolidation of Labour Acts5