IDEAS home Printed from https://ideas.repec.org/a/ebl/ecbull/eb-09-00255.html
   My bibliography  Save this article

The public sector pay premium, compensating differentials and unions: propensity score matching evidence from Australia, Canada, Great Britain and the United States

Author

Listed:
  • John Gibson

    () (University of Waikato)

Abstract

Propensity score matching is used to estimate the size of the public sector pay premium in four countries. Three sets of matching covariates are used; worker characteristics only, then including job attributes and finally adding union membership. When worker characteristics and job attributes are controlled for, the public sector pay premium ranges from 30% in Canada to 19-20% in Australia and Great Britain and only 6% in the United States. Differences in job attributes between private sector and public sector workers make almost no difference to the estimated pay premium. But once differences in union membership across sectors are controlled for, the estimated public sector pay premium is reduced in all countries and disappears in Canada. This finding favors the hypothesis that the pay premium partially reflects rents accruing to public sector workers, obtained most probably with assistance from the actions of their labor unions.

Suggested Citation

  • John Gibson, 2009. "The public sector pay premium, compensating differentials and unions: propensity score matching evidence from Australia, Canada, Great Britain and the United States," Economics Bulletin, AccessEcon, vol. 29(3), pages 2325-2332.
  • Handle: RePEc:ebl:ecbull:eb-09-00255
    as

    Download full text from publisher

    File URL: http://www.accessecon.com/Pubs/EB/2009/Volume29/EB-09-V29-I3-P77.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. 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.
    2. James M. Poterba & Kim S. Rueben, 1998. "Fiscal Institutions and Public Sector Labor Markets," NBER Working Papers 6659, National Bureau of Economic Research, Inc.
    3. John Gibson & Steven Stillman, 2009. "Why Do Big Firms Pay Higher Wages? Evidence from an International Database," The Review of Economics and Statistics, MIT Press, vol. 91(1), pages 213-218, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gerry H. Makepeace & Michael J. Peel, 2013. "Combining information from Heckman and matching estimators: testing and controlling for hidden bias," Economics Bulletin, AccessEcon, vol. 33(3), pages 2422-2436.

    More about this item

    Keywords

    Compensating differentials; Propensity score matching; Public sector pay premium; Unions; Wages;

    JEL classification:

    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • H1 - Public Economics - - Structure and Scope of Government

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ebl:ecbull:eb-09-00255. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (John P. Conley). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.