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The Wage Penalty for State and Local Government Employees in New England

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Author Info

  • Jeffrey Thompson
  • John Schmitt

Abstract

The authors demonstrate that the average state or local government worker earns higher wages than the average private-sector worker—but only because they are, on average, older and substantially better educated. More than half of state and local government employees in New England have a four-year college degree or more, and 30% have an advanced degree. By contrast, only 38% of private-sector workers have a four-year college degree or more; and only 13% have an advanced degree. The wage gap becomes more significant at higher-paid professional levels. The lowest paid government workers do earn slightly more than their private counterparts, but for high-wage workers, the wage penalty for working for a New England state or local governments rises to almost 13%.�And while state and local workers on average do indeed receive more valuable benefits than private-sector workers, the difference only reduces the wage penalty for the average state and local government worker.

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Bibliographic Info

Paper provided by Political Economy Research Institute, University of Massachusetts at Amherst in its series Working Papers with number wp233.

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Date of creation: 2010
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Handle: RePEc:uma:periwp:wp233

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References

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  1. John Schmitt, 2008. "The Union Wage Advantage for Low-Wage Workers," CEPR Reports and Issue Briefs 2008-17, Center for Economic and Policy Research (CEPR).
  2. Dean Baker & Rivka Deutsch, 2009. "The State and Local Drag on the Stimulus," CEPR Reports and Issue Briefs 2009-17, Center for Economic and Policy Research (CEPR).
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Public employees are better paid for a reason
    by Economic Logician in Economic Logic on 2010-10-28 15:42:00
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Cited by:
  1. Robert Pollin, 2013. "Austerity Economics and the Struggle for the Soul of U.S. Capitalism," Working Papers wp321, Political Economy Research Institute, University of Massachusetts at Amherst.
  2. Jan K. Brueckner & David Neumark, 2011. "Beaches, Sunshine, and Public-Sector Pay: Theory and Evidence on Amenities and Rent Extraction by Government Workers," NBER Working Papers 16797, National Bureau of Economic Research, Inc.
  3. Philipp Bewerunge & Harvey S. Rosen, 2012. "Wages, Pensions, and Public-Private Sector Compensation Differentials," Working Papers 1388, Princeton University, Department of Economics, Center for Economic Policy Studies..

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  1. Economic Logic blog

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