Public-private sector wage gap by gender in Egypt: Evidence from quantile regression on panel data, 1998–2018

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Abstract This paper estimates the public-formal private wage gap in Egypt using Egypt Labor Market Panel Survey for the 20 year period of 1998–2018 for men and women separately. We estimate the public-formal private sector wage gap with wage equations including a public sector indicator both at the mean and at different quantiles of the conditional wage distribution using the panel feature of the data. We also address the endogenous employment and the sector of employment selection issue and find a persistent public wage penalty for the males and public wage premium for the females (except at the top) even after controlling for the observable and the time-invariant unobservable characteristics. We further examine the public wage gap over time and in different sub-samples by potential experience, skill levels and regions. Generally, the results are consistent with a decrease in the public wage gap for both men and women over the period considered. We further provide evidence on the quality of workers. We find that the public sector fails to attract better quality men throughout the conditional wage distribution while it manages to attract better quality women in the lower parts of the conditional wage distribution but not at the top, all on the basis of time-invariant unobservable attributes. These results indicate concern for the efficient provision of public services.