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Overpaid or underpaid? A state-by-state ranking of public-employee compensation

Author

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  • Andrew G. Biggs

    (American Enterprise Institute)

  • Jason Richwine

Abstract

This paper ranks all 50 states according to how costly their public-employee compensation packages are relative to private-sector standards. Each state's package is placed into one of five categories: modest penalty, market level, modest premium, large premium, or very large premium. The results show that national-level analyses obscure significant differences in compensation from state to state. Connecticut, for example, pays its state employees 42 percent more than what similar private-sector workers receive, but Virginia pays its state workers about 6 percent less. State-by-state political interest in public-sector pay aligns fairly well with our results: In states where public sector pay is an active political issue, state government employees appear to be better compensated than similarly-skilled private sector workers. In states where state government compensation is at or below market levels, pay for public employees is generally less controversial.

Suggested Citation

  • Andrew G. Biggs & Jason Richwine, 2014. "Overpaid or underpaid? A state-by-state ranking of public-employee compensation," AEI Economics Working Papers 415891, American Enterprise Institute.
    • Handle: RePEc:aei:rpaper:415891
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    Cited by:

    1. Amihai Glazer & Hideki Konishi, 2017. "Why High-level Executives Earn Less in the Government Than in the Private Sector," Working Papers 1713, Waseda University, Faculty of Political Science and Economics.

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    Keywords

    Public Pensions; Policy Papers;

    JEL classification:

    • A - General Economics and Teaching

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