The Public-Private Wage Gap in Russia and in Europe

The current study is devoted to evaluating the public-private wage gap in Russia and several European countries taking social and demographic employees’ characteristics into account. In the frameworks of the first chapter the literature review is conducted to explore the subject comprehensively. In addition, an attempt to give an explanation for reasons affecting wage differentials is made. It is supposed that differences in individual skills apparently influence the wage gap index. In the second chapter, the descriptive analysis which enables to formulate a conclusion on the condition of the budget and non-budget sectors is carried out. It is found out that the labour force in the public sector possesses greater human capital. The public workers tend to have a higher level of education than those in the private sector. In the selected countries, the relative presence of workers with tertiary education clearly outweighs the proportion of workers with lower skills in the public sector. In addition, it was found that civil servants are very productive and capable of working several hours more every week. In the third chapter the evaluation of the equation has demonstrated that on average private sector employees earn higher wages than public sector employees. The public-private wage gap size amounts 19% in 2013 and 20% in 2014.