The public-private sector wage differential for full-time male employees in Britain: a preliminary analysis

Monojit Chatterji, Karen Mumford

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    Abstract

    Relative employment conditions have changed across the public and private sectors in Britain over the last decade with the former becoming a more attractive earnings option. 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. Whilst there is some evidence of workplace segregation in the private sector, there is little indication that rates of return vary across the earnings distribution for either public or private sector employees. It no longer appears to be the case that the public sector provides a refuge for the low skilled at the expense of the highly educated. Furthermore, working conditions appear more uniform in the public sector and, unlike the private sector, there is no significant penalty associated with ethnic background.
    Original languageEnglish
    PublisherUniversity of Dundee
    Publication statusPublished - 2007

    Publication series

    NameDundee Discussion Papers in Economics
    PublisherUniversity of Dundee
    No.201
    ISSN (Print)1473-236X

    Keywords

    • Public sector earnings
    • Male
    • Earnings-gap
    • Interquantile
    • Segregation

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  • Cite this

    Chatterji, M., & Mumford, K. (2007). The public-private sector wage differential for full-time male employees in Britain: a preliminary analysis. (Dundee Discussion Papers in Economics; No. 201). University of Dundee.