In almost all the countries in our sample, the public sector pays a higher wage premium to women compared to men (Figure 12). On average across all countries, women receive a wage premium of 27 percent, as compared to 14 percent for men, and the premium is higher in all regions of the world but MENA. The reasons for these gender differences could be due to both employment and wage factors. Women could be disproportionately represented in public sector occupations, such as teaching and nursing, which have a higher wage premium. Wage discrimination against women may also be lower in the public sector given that salary scales are determined by regulations and may leave less discretion for managers to differentiate pay based on gender for similar occupations and workers. The higher public sector earnings premium for women could help to explain why women are more likely to find work in the public sector than men, especially if the reason is that women face discrimination in the private sector but not in the public sector.<sup>12</sup> These relative gender differences are an important area for further research.

# **5. Conclusion**

There is a rich literature on public‐private wage premiums that focuses largely on high‐income countries. Our paper adds to this literature by exploring this topic for a larger set of countries, particularly developing countries, than has been done in the past. In doing

**Figure 12: Premiums by gender; public vs. private employees**

<!-- Start of picture text --> Overall<br>Sub‐Saharan African<br>South Asia<br>Middle East and North Africa<br>Latin America and Caribbean<br>Eastern Europe and Central Asia<br>East Asia and Pacific<br>‐0.1 0 0.1 0.2 0.3 0.4 0.5 0.6<br>For women For men<br><!-- End of picture text --> _Source_ : WWBI, unweighted means across countries so, we reinforce some findings in the literature, while also obtaining more surprising results. As in other studies, we find that the public sector pays a wage premium. However, this premium disappears tin most developing countries when public sector workers are compared to private sector formal workers. In that case, the premium is higher for women, lower skilled employees, and employees with lower unexplained wages. These patterns suggest that that the public sector premium for public sector workers may be smaller in magnitude than the private sector penalty for private sector workers, who tend to be less well‐educated and have lower‐paid jobs than their public sector counterparts. Furthermore, there is no significant relationship between country income levels and the size of the wage premium, either compared to all wage employees or only formal sector wage employees.

The paper points to several questions for future research. First, what is the appropriate private sector comparator given the heterogeneity in premiums across employee characteristics? Administrative data sets that identify transitions between public and private sector employment, or panel household surveys with rich information on workers’ skills, can be potentially valuable sources of data to explore this issue. The appropriate comparator may also differ for different types of workers. Second, what are the determinants of the cross‐country heterogeneity in the size of the wage premiums given that country income levels are not a major factor? The literature emphasizes the strength of public sector employee unions, but there are no studies to our knowledge that explore the role of unions in a large sample of countries. Other possible explanations could be the strength of political business cycles, the 12 In Turkey, Tansel (2005) finds public sector wage premiums for women are higher because men earn more than women in the private formal sector, while men and women are paid essentially the same in the public sector.

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