Public Sector Wages and Bureaucratic Quality : Evidence from Latin America

The purpose of this paper is to present evidence on public-private wage differential for a sample of Latin American countries and to discuss the relationship between public-private wage differentials and bureaucratic quality in the Region. The paper starts by estimating public-private wage differentials for a sample of 17 Latin American countries covering 88 percent of the population of the Region. Next, the paper looks at the relationship between bureaucratic quality and public-private wage differentials and finds that, while there is no correlation between average public sector wages and bureaucratic quality, there is a positive correlation between bureaucratic quality and the degree of meritocracy of the public sector