IDEAS home Printed from https://ideas.repec.org/h/nbr/nberch/7153.html
   My bibliography  Save this book chapter

Wages in the Federal and Private Sectors

In: Public Sector Payrolls

Author

Listed:
  • Steven F. Venti

Abstract

This study addresses the legal principle of "comparability" that ties federal sector wages to wages in the private sector. We first examine comparability by determining if workers with similar observed and unobserved characteristics receive the same wages in each sector. Estimates based on data from the 1982 CPS indicate males may have a slight wage advantage in the federal sector. Female workers earn substantially more in the federal sector than inthe private sector. We then develop a choice-theoretic approach to the issue of comparability by applying a simple supply argument: a cost-minimizing federal employer would pay wages no higher than necessary to attract employees and eliminate queues for federal jobs. If the market pays equalizing differences for unique attributes of each sector, then this approach is not consistent with wage equality between the sectors. A model jointly determining sectoral attachment and wage offers is estimated by maximum likelihood. Results suggest the elimination of queues will require substantial wage reductions for both male and female federal employees.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Steven F. Venti, 1987. "Wages in the Federal and Private Sectors," NBER Chapters,in: Public Sector Payrolls, pages 147-182 National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberch:7153
    as

    Download full text from publisher

    File URL: http://www.nber.org/chapters/c7153.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Duncan, Greg J & Holmlund, Bertil, 1983. "Was Adam Smith Right after All? Another Test of the Theory of Compensating Wage Differentials," Journal of Labor Economics, University of Chicago Press, vol. 1(4), pages 366-379, October.
    2. Robert S. Smith & Ronald G. Ehrenberg, 1983. "Estimating Wage-Fringe Trade-Offs: Some Data Problems," NBER Chapters,in: The Measurement of Labor Cost, pages 347-370 National Bureau of Economic Research, Inc.
    3. F. L. Jones, 1983. "On Decomposing the Wage Gap: A Critical Comment on Blinder's Method," Journal of Human Resources, University of Wisconsin Press, vol. 18(1), pages 126-130.
    4. Joseph F. Quinn, 1979. "Wage Differentials among Older Workers in the Public and Private Sectors," Journal of Human Resources, University of Wisconsin Press, vol. 14(1), pages 41-62.
    5. Richard B. Freeman, 1987. "How Do Public Sector Wages and Employment Respond to Economic Conditions?," NBER Chapters,in: Public Sector Payrolls, pages 183-216 National Bureau of Economic Research, Inc.
    6. Ernst R. Berndt & Bronwyn H. Hall & Robert E. Hall & Jerry A. Hausman, 1974. "Estimation and Inference in Nonlinear Structural Models," NBER Chapters,in: Annals of Economic and Social Measurement, Volume 3, number 4, pages 653-665 National Bureau of Economic Research, Inc.
    7. Ehrenberg, Ronald G. & Schwarz, Joshua L., 1987. "Public-sector labor markets," Handbook of Labor Economics,in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 2, chapter 22, pages 1219-1260 Elsevier.
    8. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
    9. Sherwin Rosen, 1996. "The Equilibrium Approach to Labor Markets," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 33(99), pages 189-204.
    10. John M. Abowd & Henry S. Farber, 1982. "Job Queues and the Union Status of Workers," ILR Review, Cornell University, ILR School, vol. 35(3), pages 354-367, April.
    11. Charles Brown, 1980. "Equalizing Differences in the Labor Market," The Quarterly Journal of Economics, Oxford University Press, vol. 94(1), pages 113-134.
    12. Poirier, Dale J., 1980. "Partial observability in bivariate probit models," Journal of Econometrics, Elsevier, vol. 12(2), pages 209-217, February.
    13. Timothy Smeeding, 1983. "The Size Distribution of Wage and Nonwage Compensation: Employer Cost versus Employee Value," NBER Chapters,in: The Measurement of Labor Cost, pages 237-286 National Bureau of Economic Research, Inc.
    14. Don Bellante & Albert N. Link, 1981. "Are Public Sector Workers More Risk Averse Than Private Sector Workers?," ILR Review, Cornell University, ILR School, vol. 34(3), pages 408-412, April.
    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. Denis Fougère & Julien Pouget, 2003. "Les déterminants économiques de l'entrée dans la fonction publique," Économie et Statistique, Programme National Persée, vol. 369(1), pages 15-48.
    2. Fábio Veras Soares, 2004. "Do Informal Workers Queue For Formal Jobs in Brazil ?," Discussion Papers 1021, Instituto de Pesquisa Econômica Aplicada - IPEA.
    3. Moundir, Lassassi & Menna, Khaled, 2016. "La Notion De « Femmes Au Foyer » En Algerie, Une Realite Ou Une Representation Nostalgique
      [The Notion Of “ Homemaker” In Algeria, A Reality Or A Nostalgic Representation]
      ," MPRA Paper 85740, University Library of Munich, Germany.
    4. Christofides, Louis N. & Pashardes, Panos, 2002. "Self/paid-employment, public/private sector selection, and wage differentials," Labour Economics, Elsevier, vol. 9(6), pages 737-762, December.
    5. Bahman Bahrami & John Bitzan & Jay Leitch, 2009. "Union Worker Wage Effect in the Public Sector," Journal of Labor Research, Springer, vol. 30(1), pages 35-51, March.
    6. Rebecca M. Blank, 1993. "Public Sector Growth and Labor Market Flexibility: The United States vs. The United Kingdom," NBER Working Papers 4339, National Bureau of Economic Research, Inc.
    7. Alan B. Krueger, 1988. "Are Public Sector Workers Paid More Than Their Alternative Wage? Evidence from Longitudinal Data and Job Queues," NBER Chapters,in: When Public Sector Workers Unionize, pages 217-242 National Bureau of Economic Research, Inc.
    8. repec:eee:labchp:v:3:y:1999:i:pc:p:3573-3630 is not listed on IDEAS
    9. Aslam, Monazza & Kingdon, Geeta, 2009. "Public-private sector segmentation in the Pakistani labour market," Journal of Asian Economics, Elsevier, vol. 20(1), pages 34-49, January.
    10. Rebecca M. Blank, 1994. "Public Sector Growth and Labor Market Flexibility: The United States versus the United Kingdom," NBER Chapters,in: Social Protection versus Economic Flexibility: Is There a Trade-Off?, pages 223-264 National Bureau of Economic Research, Inc.
    11. Robert A. Margo & T. Aldrich Finegan, 1995. "Changes in the Distribution of Wages, 1940-1950: The Public vs. the Private Sector," NBER Working Papers 5389, National Bureau of Economic Research, Inc.
    12. Alejandra Mizala & Pilar Romaguera & Sebastian Gallegos, 2010. "Public-Private Wage Gap In Latin America (1999-2007): A Matching Approach," Documentos de Trabajo 268, Centro de Economía Aplicada, Universidad de Chile.

    More about this item

    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:nbr:nberch:7153. 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: (). General contact details of provider: http://edirc.repec.org/data/nberrus.html .

    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.