A Multi-step Process Approach for Estimating Public Sector Wages. The Spanish Experience

Abstract

We propose a semiparametric model including problems of sample selection and endogeneity. Concretely, we focus on studying the effect of tenure in public sector wages. Here we face two problems: Public wages are only observed for public employees and the tenure is endogenous. The chosen method allows the introduction of a nonparametric control function and relaxing usual strong assumptions. This approach is applied to a wage model for the Spanish Public Sector, using the wage structure survey of 2016.