Regional pay inequalities in health care

Date of project : 2021 - 2022

This study is part of a project funded by the Ministry of Social Affairs and Health and conducted together with the Finnish Institute for Health and Welfare that develops ways of addressing the impacts of the new wellbeing services counties’ circumstances on the cost level of social welfare and health care services.


The VATT Institute for Economic Research’s part of the project examines regional pay inequalities in the health sector. As the main data set is used Statistics Finland's individual-level Structure of Earnings data, which contain detailed information on pay, working hours and occupations. Based on these data, pay for regular working hours can be separated from pay increments, and various comparable pay-related variables can be formed. Additional information on workplace location and employees’ background characteristics from other Statistics Finland data sets are combined with the Structure of Earnings data.  

Regional pay inequalities are measured using a statistical regression model, in which the salaries of health and social care (or private sector) personnel are explained by indicator variables describing workplace location (municipality or well-being services county). An effort is made to separate the effect of workplace location from other factors affecting salaries by using control variables describing the employees’ characteristics (including job title, training and work experience). Regional pay inequalities are described both for the entire social and health care sector and, if possible, by occupational group and the employer's sector (private or public). Pay inequalities in social welfare and health care are also compared to pay gaps in the private sector as a whole.

Responsible researcher: Teemu Lyytikäinen, [email protected],+358 295 519 431

Markku SiikanenMax ToikkaTanja SaxellTeemu Lyytikäinen Healthcare servicesLocal public finance and provision of public servicesMinistry of social affairs and healthMunicipalities and wellbeing services countiesTeemu Lyytikäinen