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

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  • George J. Borjas

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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Bibliographic Info

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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  1. Rebecca M. Blank, 1985. "An analysis of workers' choice between employment in the public and private sectors," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 38(2), pages 211-224, January.
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  5. Katz, L.F. & Krueger, A.B., 1991. "Chances In The Structure Of Wages In The Public And Private Sectors," Harvard Institute of Economic Research Working Papers 1547, Harvard - Institute of Economic Research.
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  9. Borjas, George J, 1980. "Wage Determination in the Federal Government: The Role of Constituents and Bureaucrats," Journal of Political Economy, University of Chicago Press, vol. 88(6), pages 1110-47, December.
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  11. 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.
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  14. Richard B. Freeman, 1991. "How Much Has De-Unionisation Contributed to the Rise in Male Earnings Inequality?," NBER Working Papers 3826, National Bureau of Economic Research, Inc.
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  16. Borjas, George J, 1984. "Electoral Cycles and the Earnings of Federal Bureaucrats," Economic Inquiry, Western Economic Association International, vol. 22(4), pages 447-59, October.
  17. Joseph Gyourko & Joseph Tracy, 1986. "An Analysis of Public and Private Sector Wages Allowing for Endogenous Choices of Both Government and Union Status," NBER Working Papers 1920, National Bureau of Economic Research, Inc.
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  19. Richard A. Ippolito, 1987. "Why Federal Workers Don't Quit," Journal of Human Resources, University of Wisconsin Press, vol. 22(2), pages 281-299.
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