Fig. 3

The public pay gap and potential determinants. Notes: This figure shows the partial correlations between the public sector pay gap and country characteristics. Panels a to c show partial correlations with characteristics linked to the government monopolistic power in the provision of public services; see column (2) of Table 2. Specifically, panels a, b, and c show the partial correlation of the size of the public sector (share of public sector employees), the composition of the public sector (specialization in public goods), and the exposure to international trade (specialization in tradable goods), respectively. Panels d and e show the correlation (in deviations with respect to the mean) between labor market institutions and the public sector pay gap. Panel d shows the correlation of an index of employment protection legislation (column (2) of Table 3) and panel e of an index of trade union density (column (3)). Finally, panel f shows the correlation (in deviations with respect to the mean) between improvements in the CAPB during the crisis and changes in the public sector pay gap; see column (1) of Table 4. Improvements in the CAPB are computed as the CAPB in 2012 minus the minimum in the period 2007–2011. Changes in the public sector pay gap correspond to the same period