Short Analyses

Short Analyses

Wage Differences Between the Public and Private Sector and the Wage Premium

The analysis shows that, as in other countries, the average wage in the public sector in Slovenia is higher than in the private sector. In the period 2005−2022, the average wage in the public sector was about a quarter higher than the average wage in the private sector.

The difference in the average wage between the public and private sector is influenced by differences in the demographic and employment structure of employees, such as differences in educational structure, gender, age, type of contract, professions, etc. The distribution of wage levels differs significantly between the sectors due to these differences. In the private sector, the distribution is much more concentrated at lower wage levels, mainly due to occupations that appear in the private sector but not in the public sector. The distributions are more similar if we only compare occupations that are common to both the public and private sector.

Estimates of wage differences, after eliminating certain demographic-employment differences in the structure of employees between the sectors, show that wages in the public sector are lower in medium and high professional occupational groups (negative public sector wage premium) but higher in occupations with simpler tasks (positive public sector wage premium).

This short analysis is a direct update of the analysis on wage differences between the public and private sector from Economic Issues 2018 (IMAD 2018) and Roter et al. (2017), this time based on detailed administrative microdata of employees.