IDEAS home Printed from
   My bibliography  Save this paper

Flying High and Laying Low in the Public and Private Sectors: A Comparison of Pay Differentials for Full-Time Male Employees in Britain


  • Chatterji, Monojit
  • Mumford, Karen


Using new linked employee-employer data for Britain in 2004, this paper shows that, on average, full-time male public sector employees earn 11.7 log wage points more than their private sector counterparts. Decomposition analysis reveals that the majority of this pay premium is associated with public sector employees having individual characteristics associated with higher pay and to their working in higher paid occupations. Further focussing analysis on the highly skilled and unskilled occupations in both sectors, reveals evidence of workplace segregation positively impacting on earnings in the private sector for the highly skilled, and in the public sector for the unskilled. Substantial earnings gaps between the highly skilled and unskilled are found, and the unexplained components in these gaps are very similar regardless of sector.

Suggested Citation

  • Chatterji, Monojit & Mumford, Karen, 2008. "Flying High and Laying Low in the Public and Private Sectors: A Comparison of Pay Differentials for Full-Time Male Employees in Britain," SIRE Discussion Papers 2008-11, Scottish Institute for Research in Economics (SIRE).
  • Handle: RePEc:edn:sirdps:24

    Download full text from publisher

    File URL:
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    1. Karen Mumford & Peter N. Smith, 2004. "Job Tenure in Britain: Employee Characteristics versus Workplace Effects," Economica, London School of Economics and Political Science, vol. 71(281), pages 275-297, May.
    2. James M. Poterba & Kim S. Rueben, 1994. "The Distribution of Public Sector Wage Premia: New Evidence Using Quantile Regression Methods," NBER Working Papers 4734, National Bureau of Economic Research, Inc.
    3. Stephen Nickell & Glenda Quintini, 2002. "The Consequences of The Decline in Public Sector Pay in Britain: A Little Bit of Evidence," Economic Journal, Royal Economic Society, vol. 112(477), pages 107-118, February.
    4. Mumford, Karen A. & Smith, Peter N., 2007. "Assessing the Importance of Male and Female Part-Time Work for the Gender Earnings Gap in Britain," IZA Discussion Papers 2981, Institute for the Study of Labor (IZA).
    5. Yu, Keming & Van Kerm, Philippe & Zhang, Jin, 2004. "Bayesian quantile regression: An application to the wage distribution in 1990s Britain," IRISS Working Paper Series 2004-10, IRISS at CEPS/INSTEAD.
    6. David Neumark, 1988. "Employers' Discriminatory Behavior and the Estimation of Wage Discrimination," Journal of Human Resources, University of Wisconsin Press, vol. 23(3), pages 279-295.
    7. Oaxaca, Ronald L. & Ransom, Michael R., 1994. "On discrimination and the decomposition of wage differentials," Journal of Econometrics, Elsevier, vol. 61(1), pages 5-21, March.
    Full references (including those not matched with items on IDEAS)

    More about this item


    public sector earnings; fixed effects; earnings-gap; decompositions; segregation; male;

    JEL classification:

    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J7 - Labor and Demographic Economics - - Labor Discrimination


    Access and download statistics


    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:edn:sirdps:24. 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: (Research Office). 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.