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Comparative review of the income gap between the public and private sectors in Ecuador from the equalization policies

Abstract:

The aim of this research is to study the wage gap between public and private sector employees in Ecuador. The methodology used is the Oaxaca and Blinder method (decomposition method). The necessary microdata is obtained from the National Survey of Employment, Unemployment and Underemployment (ENEMDU) of the National Institute of Statistics and Censuses (INEC) for the years 2008, 2013 and 2018. The results obtained suggest the existence of a gap between public and private sectors, where public sector wages are relatively higher than those of the private sector. In addition, schooling and experience influence income levels positively, with the latter being the most determining factor. The decomposition of income gaps by sector shows that the wage gap responds to differences in human capital endowments and to discriminatory components of the labour force. The policy implications are aimed at reducing the public-private income gap.