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| Title: | Public Sector Pay and Corruption: Measuring Bribery from Micro-Data |
| Authors: | Gorodnichenko, Yuriy
Sabrianova, Klara |
| Keywords: | corruption, bribery, public sector, wage, wage differentials, consumption, Ukraine |
| Issue Date: | 12-Sep-2007 |
| Series/Report no.: | IPC Working Paper Series No. 47 |
| Abstract: | This study provides the first systematic measure of bribery using micro-level data on reported earnings, household spending and asset holdings. We use the compensating differential framework and the estimated sectoral gap in reported earnings and expenditures to identify the size of unobserved (unofficial) compensation (i.e., bribes) of public sector employees. In the
case of Ukraine, we find that public sector employees receive 24-32% less wages than their private sector counterparts. The gap is particularly large at the top of the wage distribution. At the same time, workers in both sectors have essentially identical level of consumer expenditures and asset holdings that unambiguously indicate the presence of non-reported compensation in the
public sector. Using the conditions of labor market equilibrium, we develop an aggregate
measure of bribery and find that the lower bound estimate of the extent of bribery in Ukraine is between 460 mln and 580 mln U.S. dollars (0.9-1.2% of Ukraine’s GDP in 2003). |
| Appears in Collections: | International Policy Center - Working Paper Series
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| Public Sector Pay - Gorodnichenko.pdf | | 337Kb | Adobe PDF | View/Open |
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