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The Wage Penalty for State and Local Government Employees in New England

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  • Jeffrey Thompson
  • John Schmitt

Abstract

The authors demonstrate that the average state or local government worker earns higher wages than the average private-sector worker—but only because they are, on average, older and substantially better educated. More than half of state and local government employees in New England have a four-year college degree or more, and 30% have an advanced degree. By contrast, only 38% of private-sector workers have a four-year college degree or more; and only 13% have an advanced degree. The wage gap becomes more significant at higher-paid professional levels. The lowest paid government workers do earn slightly more than their private counterparts, but for high-wage workers, the wage penalty for working for a New England state or local governments rises to almost 13%. And while state and local workers on average do indeed receive more valuable benefits than private-sector workers, the difference only reduces the wage penalty for the average state and local government worker.

Suggested Citation

  • Jeffrey Thompson & John Schmitt, 2010. "The Wage Penalty for State and Local Government Employees in New England," Working Papers wp233, Political Economy Research Institute, University of Massachusetts at Amherst.
  • Handle: RePEc:uma:periwp:wp233
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    File URL: https://www.peri.umass.edu/fileadmin/pdf/working_papers/working_papers_201-250/WP233.pdf
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    References listed on IDEAS

    as
    1. Dean Baker & Rivka Deutsch, 2009. "The State and Local Drag on the Stimulus," CEPR Reports and Issue Briefs 2009-17, Center for Economic and Policy Research (CEPR).
    2. John Schmitt, 2008. "The Union Wage Advantage for Low-Wage Workers," CEPR Reports and Issue Briefs 2008-17, Center for Economic and Policy Research (CEPR).
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Public employees are better paid for a reason
      by Economic Logician in Economic Logic on 2010-10-28 20:42:00

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    1. repec:pri:cepsud:227rosen is not listed on IDEAS
    2. Jan K. Brueckner & David Neumark, 2014. "Beaches, Sunshine, and Public Sector Pay: Theory and Evidence on Amenities and Rent Extraction by Government Workers," American Economic Journal: Economic Policy, American Economic Association, vol. 6(2), pages 198-230, May.
    3. Maury Gittleman & Brooks Pierce, 2012. "Compensation for State and Local Government Workers," Journal of Economic Perspectives, American Economic Association, vol. 26(1), pages 217-242, Winter.
    4. Robert Pollin, 2013. "Austerity Economics and the Struggle for the Soul of U.S. Capitalism," Working Papers wp321, Political Economy Research Institute, University of Massachusetts at Amherst.

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