What Would the Average Public Sector Employee be Paid in the Private Sector?
This paper estimates the average Australian public sector wage premium. It includes a detailed critical review of the methods available to address this issue. The chosen approach is a quasi-differenced panel data model, estimated by the Generalised Method of Moments, which has many advantages over other methods and has not been used before for this topic. I find a positive average public sector wage premium for both sexes. The best estimates are 6.7% for men and 10.5% for women. The estimate is statistically significant for men (p = 0.024) and for women (p
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Department of Economics - Working Papers Series
514, The University of Melbourne.
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