Buscador de Personas - SIGEVA - Universidad Nacional de Córdoba

his paper examines the relationship between federal transfers, the existence of a wage premium for the public sector and its effects on private wages in Argentina. The empirical analysis is based on the theoretical presumption that federal fiscal transfers to the different regions may actually be used to finance more public employment therefore discouraging private activity. Our results suggest that the public sector pays a wage premium relative to the private sector. This premium is increasing in the level of per capita federal transfers. There is no evidence suggesting that federal transfers have an effect on wages in the private manufacturing sector at the aggregate level. However, we find a significant positive relationship between federal transfers and wages paid to workers with less formal education; for jobs requiring a technical or professional qualification the relationship between wages and federal transfers is negative. These results broadly support our hypothesis that the

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