Evidence of the Public–Private Wage Gap for Brazil in the Period from 2008 to 2016

Abstract

The present study aims to analyze the wage gap between the public and private sectors in Brazil from 2008 to 2016 based on microdata from the Annual Social Information Report (Relacao Anual de Informacoes Sociais, RAIS). The results show that public-sector wages are higher than private-sector wages in Brazil and are decreasing at federal, state, and municipal levels. These differences are greater for workers in the judiciary, and in large municipalities and metropolises. The most skilled individuals receive lower salaries in the public sector, and the public–private difference is greater among women than men. It is also possible to verify that the wage gap can be explained better by the composition of employees in each sector than by the unobserved characteristics that affect the ways in which the sectors pay. At the end of the analyzed period, there is a reduction in participation in private-sector employment and an increase in the public–private wage gap with the economic downturn in the country.