Private and public sector wage equations are estimated using 1995 Bulgarian data. We treat the sector of employment as endogenous and control for selectivity in the wage equations. We find that individuals have a lower probability of employment in the private sector if they have more experience, if they have higher education, and if they are ethnic Bulgarians. In addition they have a higher probability of employment in the private sector the more farmland they received in the restitution program. Wages of women in the private sector do not increase with experience or schooling. However, wages of men in the private sector increase with experience at a higher rate than in the public sector and increase with higher education at comparable rates in both sectors. Journal of Comparative Economics 32 (1) (2004) 56-72.