Private and Public Sector Wage Differentials in Taiwan

Many researchers have interested in the public sector, and there is a great deal of general literature on estimating the wage premium for Taiwan''s public sectors versus private sectors .There are few specific studies, however, on how the wage premium of public sectors changes over time and the possible correlation between the wage premium and the registration rate of the civil service examination. Data of Taiwan’s Manpower Utilization Surveys from 1978 to 2010 was used and two conclusions were found in this paper. First, the public sector wage premium was negative for Professional Workers during early 1980s; however, a positive wage premium had existed since the 1980s and sharply increased in recent years. Second, although we failed to find the possible correlation between the civil service examination registration rate and public sector wage premium, we found the registration rate was positive and significantly correlated with unemployment rates. These results are worth taking into consideration for future policies making by the government.