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The Wage Structure and the Sorting of Workers into the Public Sector

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Author Info
George J. Borjas

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Abstract

This paper uses data from the U.S. Decennial Census and the Current Population Surveys to document the differential shifts that occurred in the wage structures of the public and privatesectors between 1960 and 2000. The wage gap between the typical public sector worker and a comparable private sector worker was relatively constant for men during this period, but declined substantially for women. Equally important, wage dispersion in the public sector was increasing relative to wage dispersion in the private sector prior to 1970, at the time when public sector employment was rising rapidly. Since 1970, however, there has been a significant relative compression of the wage distribution in the public sector. The different evolutions of the wage structures in the two sectors are an important determinant of the sorting of workers across sectors. As a result of the relative wage compression, the public sector found it increasingly more difficult to attract and retain high-skill workers

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 9313.

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Date of creation: Nov 2002
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Handle: RePEc:nbr:nberwo:9313

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Find related papers by JEL classification:
J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
J4 - Labor and Demographic Economics - - Particular Labor Markets

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  4. Black, Matthew & Moffitt, Robert & Warner, John T, 1990. "The Dynamics of Job Separation: The Case of Federal Employees," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 5(3), pages 245-62, July-Sept. [Downloadable!] (restricted)
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  7. Moulton, Brent R, 1990. "A Reexamination of the Federal-Private Wage Differential in the United States," Journal of Labor Economics, University of Chicago Press, vol. 8(2), pages 270-93, April. [Downloadable!] (restricted)
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  9. Ronald G. Ehrenberg & Joshua L. Schwarz, 1987. "Public Sector Labor Markets," NBER Working Papers 1179, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  10. Borjas, George J, 1982. "The Politics of Employment Discrimination in the Federal Bureaucracy," Journal of Law & Economics, University of Chicago Press, vol. 25(2), pages 271-99, October.
  11. Lawrence F. Katz & Alan B. Krueger, 1991. "Changes in the Structure of Wages in the Public and Private Sectors," NBER Working Papers 3667, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  12. Rebecca M. Blank, 1985. "An analysis of workers' choice between employment in the public and private sectors," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 38(2), pages 211-224, January.
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  15. Katz, Lawrence F. & Autor, David H., 1999. "Changes in the wage structure and earnings inequality," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 26, pages 1463-1555 Elsevier. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Ignacio García-Pérez & Juan F. Jimeno, 2005. "Public sector wage gaps in Spanish regions," Banco de España Working Papers 0526, Banco de España. [Downloadable!]
    Other versions:
  2. Simon Luechinger & Alois Stutzer & Rainer Winkelmann, 2006. "The Happiness Gains from Sorting and Matching in the Labor Market," IZA Discussion Papers 2019, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  3. Michael Gibbs, 2005. "Returns to Skills and Personnel Management: U.S. DoD Scientists and Engineers," IZA Discussion Papers 1539, Institute for the Study of Labor (IZA). [Downloadable!]
  4. Clare Leaver & Gian Luigi Albano, 2004. "Transparency, Recruitment and Retention in the Public Sector," Economics Series Working Papers 219, University of Oxford, Department of Economics. [Downloadable!]
  5. Natália Pimenta Monteiro, 2004. "Regulatory reform and the Portuguese banking labour market: two decades later," NIPE Working Papers 10/2004, NIPE - Universidade do Minho. [Downloadable!]
  6. Yuriy Gorodnichenko & Klara Sabirianova Peter, 2006. "Public Sector Pay and Corruption: Measuring Bribery from Micro Data," IZA Discussion Papers 1987, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  7. Budria, Santiago, 2006. "Schooling and the distribution of wages in the european private and public sectors," MPRA Paper 90, University Library of Munich, Germany. [Downloadable!]
  8. Disney, Richard F & Gosling, Amanda, 2003. "A New Method for Estimating Public Sector Pay Premia: Evidence from Britain in the 1990's," CEPR Discussion Papers 3787, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  9. Robert A. J. Dur & Amihai Glazer, 2004. "Optimal Incentive Contracts For a Worker Who Envies His Boss," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  10. Gian Luigi Albano & Clare Leaver, 2005. "Transparency, Recuitment and Retention in the Public Sector," The Centre for Market and Public Organisation 05/132, Department of Economics, University of Bristol, UK. [Downloadable!]
  11. John S. Heywood & Daniel Parent, 2009. "Performance Pay and the White-Black Wage Gap," Cahiers de recherche 0916, CIRPEE. [Downloadable!]
    Other versions:
  12. Fabien Postel-Vinay & Hélène Turon, 2005. "The Public Pay Gap in Britain: Small Differences That (Don't?) Matter," IZA Discussion Papers 1637, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  13. Pfeifer, Christian, 2008. "Risk Aversion and Sorting into Public Sector Employment," IZA Discussion Papers 3503, Institute for the Study of Labor (IZA). [Downloadable!]
  14. Johannes Hörner & L. Rachel Ngai & Claudia Olivetti, 2004. "Public Enterprises and Labor Market Performance," CEP Discussion Papers dp0610, Centre for Economic Performance, LSE. [Downloadable!]
    Other versions:
  15. Patricia Crifo & Jean-Louis Rullière, 2004. "Incentives and Anonymity Principle: Crowding Out Toward Users," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  16. Céline Choulet, 2006. "Public jobs creation and unemployment dynamics," Cahiers de la Maison des Sciences Economiques v06026, Université Panthéon-Sorbonne (Paris 1). [Downloadable!]
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