Citation

Discussion Paper Details

Please find the details for DP5585 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: Public Sector Pay and Corruption: Measuring Bribery from Micro Data

Author(s): Yuriy Gorodnichenko and Klara Sabirianova Peter

Publication Date: March 2006

Keyword(s): bribery, corruption, public sector, Ukraine, wage and wage differentials

Programme Area(s): Institutions and Economic Performance and Labour Economics

Abstract: This study is the first to provide a 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 labour 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 460m and 580m U.S. dollars (0.9-1.2% of Ukraine?s GDP in 2003).

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=5585

Bibliographic Reference

Gorodnichenko, Y and Sabirianova Peter, K. 2006. 'Public Sector Pay and Corruption: Measuring Bribery from Micro Data'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=5585