Public–Private Wage Differentials and Wage-Gap Convergence Across Thai Industries After the Onset of COVID-19

Information from the abstract

This study examines public–private wage differentials and wage-gap convergence across Thai industries, with particular attention to whether the adjustment of wage gaps changed after the onset of the COVID-19 pandemic. The public–private wage gap is measured as the log difference between government-sector and private-sector wages. Using quarterly industry-level panel data for Thailand from 2011Q1 to 2024Q4, the study applies fixed-effects panel regressions, interaction models for the period after the onset of COVID-19, initial-gap heterogeneity analysis, and σ-convergence analysis. The period after the onset of COVID-19 is operationally defined as 2020Q1 onward. The fixed-effects results indicate conditional mean reversion in public–private wage gaps within industries, with larger previous gaps associated with stronger subsequent adjustment. The effective adjustment coefficient was more negative after the onset of COVID-19, changing from −0.73 in the pre-COVID period to −0.84 from 2020Q1 onward, although the statistical evidence for this difference weakens under alternative inference methods. Baseline estimates also suggest stronger adjustment among low-initial-gap industries, although this between-group difference is not robust across all alternative specifications. The σ-convergence results show that cross-industry wage-gap dispersion declined over the study period. However, the change in the dispersion trend after 2020Q1 was not statistically significant. The results indicate within-industry conditional mean reversion and declining cross-industry wage-gap dispersion. The study contributes to the public–private wage-differential literature by shifting attention from static wage premia or penalties to the dynamic adjustment of wage gaps over time, while distinguishing within-industry conditional mean reversion from changes in cross-industry wage-gap dispersion.

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Related topics: Labor market dynamics and wage inequality · Economic Theory and Policy · Employment, Labor, and Gender Studies