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Earnings of Public Sector and Private Sector Employees in Australia: Is There a Difference?

Author

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  • Borland, Jeff
  • Hirschberg, Joe
  • Lye, Jenny

Abstract

This study examines differences in average weekly earnings between public-sector and private-sector employees in Australia. In the 1990s, average weekly earnings of full-time public sector employees were higher than for full-time private sector employees by 10 to 15 percent for males and 20 to 25 percent for females. A variety of decomposition tests are applied to examine the sources of this intersector difference in average weekly earnings. The tests generally show that higher average weekly earnings of public-sector employees are wholly explained by intersector differences in productivity-related characteristics of employees and job characteristics in each sector. Copyright 1998 by The Economic Society of Australia.

Suggested Citation

  • Borland, Jeff & Hirschberg, Joe & Lye, Jenny, 1998. "Earnings of Public Sector and Private Sector Employees in Australia: Is There a Difference?," The Economic Record, The Economic Society of Australia, vol. 74(224), pages 36-53, March.
  • Handle: RePEc:bla:ecorec:v:74:y:1998:i:224:p:36-53
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    Cited by:

    1. repec:bla:ecorec:v:93:y:2017:i::p:105-121 is not listed on IDEAS
    2. J.G. Hirschberg & D.J. Slottje, 2002. "Bounding Estimates of Wage Discrimination," Department of Economics - Working Papers Series 854, The University of Melbourne.
    3. Jacob Weisberg & Mieczslaw Waclaw Socha, 2002. "Earnings in Poland: The Private Versus the Public Sector," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 7(3), pages 17-38, Fall.
    4. Lixin Cai & Amy Y.C. Liu, 2008. "Public-Private Wage Gap in Australia: Variation Along the Distribution," CEPR Discussion Papers 581, Centre for Economic Policy Research, Research School of Economics, Australian National University.
    5. Bender, Keith A, 1998. " The Central Government-Private Sector Wage Differential," Journal of Economic Surveys, Wiley Blackwell, vol. 12(2), pages 177-220, April.
    6. 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.
    7. Kostas Mavromaras & Stephane Mahuteau & Kostas Mavromaras & Sue Richardson & Rong Zhu, 2017. "Public–Private Sector Wage Differentials in Australia," The Economic Record, The Economic Society of Australia, vol. 93, pages 105-121, June.
    8. Siminski, Peter, 2008. "What Would the Average Public Sector Employee be Paid in the Private Sector?," Economics Working Papers wp08-05, School of Economics, University of Wollongong, NSW, Australia.
    9. Panizza, Ugo & Qiang, Christine Zhen-Wei, 2005. "Public-private wage differential and gender gap in Latin America: Spoiled bureaucrats and exploited women?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 34(6), pages 810-833, December.
    10. Gregory, Robert G. & Borland, Jeff, 1999. "Recent developments in public sector labor markets," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 53, pages 3573-3630 Elsevier.
    11. Richard Disney & Amanda Gosling, 2008. "Changing public sector wage differentials in the UK," IFS Working Papers W08/02, Institute for Fiscal Studies.
    12. repec:eee:labchp:v:3:y:1999:i:pc:p:3573-3630 is not listed on IDEAS
    13. Peter Siminski, 2013. "Are low-skill public sector workers really overpaid? A quasi-differenced panel data analysis," Applied Economics, Taylor & Francis Journals, vol. 45(14), pages 1915-1929, May.
    14. Lixin Cai & Amy Y. C. Liu, 2011. "Public–Private Sector Wage Gap in Australia: Variation along the Distribution," British Journal of Industrial Relations, London School of Economics, vol. 49(2), pages 362-390, June.

    More about this item

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J39 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Other
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets

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