The Pattern And Evolution Of Geographical Wage Differentials In The Public And Private Sectors In Great Britain

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The Pattern And Evolution Of Geographical Wage Differentials In The Public And Private Sectors In Great Britain

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DAVID BELL
ROBERT F. ELLIOTT
ADA MA
ANTHONY SCOTT
ELIZABETH ROBERTS

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Abstract

Government policy on the nature of wage bargaining in the public sector can have important implications for the provision of public services. Using the New Earnings Survey, the Labour Force Survey and the British Household Panel Survey, we examine the size and evolution of public-private sector wage differentials across geographical areas within the UK and over time. Public sector bargaining structures have led to historically high wage premia, although these premia are declining over time. In high-cost low-amenity areas, such as the south-east of England, the public sector underpays relative to the private sector, therefore creating problems in recruitment to and provision of public services. Public sector labour markets are around 40 per cent as responsive to area differences in amenities and costs as are private sector labour markets. Differences in the degree of spatial variation between sectors are likely to remain, leading to persistent problems for the delivery of public services in some parts of the UK. Reform of public sector pay structures is likely to be costly, and so other non-pay policies need to be considered to increase the attractiveness of public sector jobs. Copyright © 2007 The Authors; Journal compilation © 2007 Blackwell Publishing Ltd and The University of Manchester.

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Article provided by University of Manchester in its journal Manchester School.

Volume (Year): 75 (2007)
Issue (Month): 4 (07)
Pages: 386-421
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Handle: RePEc:bla:manchs:v:75:y:2007:i:4:p:386-421

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José Luis Iparraguirre D’Elia, 2008. "Northern Ireland’s Input-Output Table. An application of Kronenberg’s Derivative Approach," Selected Research Papers ERINI 2008_ni_input_intput_tabl, Economic Research Institute of Northern Ireland. [Downloadable!]

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