A Detailed Decomposition Analysis of the Public-Private Sector Wage Gap in South Africa

Abstract

The present study examines the public-private sector wage gap in South Africa using individual cross-sectional data for 2000-14. Results from unconditional quantile regressions and generalised Oaxaca-Blinder type decompositions show that the wage gap is an inverted-U shape across the wage distribution. The 'composition effect' is more important than the 'price effect' at the bottom of the distribution while the opposite applies at the top. Key factors underpinning the 'composition effect' are unionisation, industry of employment and education, while those associated with the 'price effect' are education, race and occupation.