Changing public sector wage differentials in the UK
The paper estimates public sector wage differentials and their changes over time for men and women in the United Kingdom using panel data from the New Earnings Survey/Annual Survey of Hours and Earnings for the period 1975 to 2006. It presents estimates that are robust to unobserved workforce characteristics and that also show the impact of policy changes and cyclical factors, by allowing the average measured public sector 'premium' or 'penalty' to be time-varying. The methodology also allows us to examine the extent to which discrepancies in public and private sector pay induce changing relative qualities of the sectoral workforces. Results are given for men and women comparing mean wages in the public and private sectors as a whole. There is, on average, a very small positive premium over the whole period for public sector women and a very small penalty for men; however the variability of the differential is much more striking than the average difference. The method can also be applied to sub-groups in the labour market, and we illustrate the case of female public sector nurses and midwives, where the comparison group are private sector workers who have ever been, or will be, public sector nurses or midwives. Measured variations in this nurses' differential reflects the various changes in pay structure and government pay policies over the period; it is striking however that in the last decade, the 'raw' differential accruing to public sector nurses and midwives has declined almost continuously, whereas the composition and quality-adjusted differential shows no overall trend.
|Date of creation:||06 Feb 2008|
|Contact details of provider:|| Postal: The Institute for Fiscal Studies 7 Ridgmount Street LONDON WC1E 7AE|
Phone: (+44) 020 7291 4800
Fax: (+44) 020 7323 4780
Web page: http://www.ifs.org.uk
More information through EDIRC
|Order Information:|| Postal: The Institute for Fiscal Studies 7 Ridgmount Street LONDON WC1E 7AE|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Haskel, Jonathan & Szymanski, Stefan, 1993. "Privatization, Liberalization, Wages and Employment: Theory and Evidence for the UK," Economica, London School of Economics and Political Science, vol. 60(238), pages 161-181, May.
- Natália Pimenta Monteiro, 2004.
"Using propensity matching estimators to evaluate the impact of privatisation on wages,"
NIPE Working Papers
12/2004, NIPE - Universidade do Minho.
- Natalia Pimenta Monteiro, 2010. "Using propensity matching estimators to evaluate the impact of privatization on wages," Applied Economics, Taylor & Francis Journals, vol. 42(10), pages 1293-1313.
- Natalia Pimenta Monteiro, 2004. "Using Propensity Matching Estimators To Evaluate The Impact Of Privatisation On Wages," Royal Economic Society Annual Conference 2004 61, Royal Economic Society.
- van der Gaag, Jacques & Vijverberg, Wim, 1988. "A Switching Regression Model for Wage Determinants in the Public and Private Sectors of a Developing Country," The Review of Economics and Statistics, MIT Press, vol. 70(2), pages 244-252, May.
- Dustmann, Christian & van Soest, Arthur, 1998.
"Public and private sector wages of male workers in Germany,"
European Economic Review,
Elsevier, vol. 42(8), pages 1417-1441, September.
- Dustmann, C. & van Soest, A., 1997. "Public and Private Sector Wages of Male Workers in Germany," Economics Working Papers eco97/13, European University Institute.
- Fabien Postel-Vinay & Hélène Turon, 2007.
"The Public Pay Gap in Britain: Small Differences That (Don't?) Matter,"
Royal Economic Society, vol. 117(523), pages 1460-1503, October.
- Postel-Vinay, Fabien & Turon, Hélène, 2005. "The Public Pay Gap in Britain: Small Differences That (Don't?) Matter," IZA Discussion Papers 1637, Institute for the Study of Labor (IZA).
- Postel-Vinay, Fabien & Turon, Hélène, 2005. "The Public Pay Gap in Britain: Small Differences That (Don’t?) Matter," CEPR Discussion Papers 5296, C.E.P.R. Discussion Papers.
- Fabien Postel-Vinay & Hélène Turon, 2005. "The Public Pay Gap in Britain: Small Differences That (Don't?) Matter," The Centre for Market and Public Organisation 05/121, Department of Economics, University of Bristol, UK.
- Helene Turon & Fabien Postel-Vinay, 2005. "The Public Pay Gap in Britain: Small Differences that (Don't?) Matter," 2005 Meeting Papers 92, Society for Economic Dynamics.
- Fabien Postel-Vinay & Hélène Turon, 2005. "The Public Pay Gap in Britain: Small Differences That (Don't?) Matter," PSE Working Papers halshs-00590765, HAL.
- Borland, J. & Hirschberg, J. & Lyse, J., 1996.
"Earning of Public Sector and Private Sector Employees in Australia: Is There a Difference?,"
Department of Economics - Working Papers Series
514, The University of Melbourne.
- 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.
- George Jakubson, 1991. "Estimation and Testing of the Union Wage Effect Using Panel Data," Review of Economic Studies, Oxford University Press, vol. 58(5), pages 971-991.
- 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.
- Terrell, Katherine, 1993. "Public-private wage differentials in Haiti Do public servants earn a rent?," Journal of Development Economics, Elsevier, vol. 42(2), pages 293-314, December.
When requesting a correction, please mention this item's handle: RePEc:ifs:ifsewp:08/02. 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: (Emma Hyman)
If references are entirely missing, you can add them using this form.