May 2010, John Schmitt


In a recent report, the Center for Economic and Policy Research (CEPR) found that state and local government employees pay a wage penalty of about four percent for working in the public sector, relative to those at the same age and education level in the private sector. In the “raw” data – that is before controlling for age and education – state and local government workers appeared to earn about 13 percent more than private-sector workers. But, state and local workers are, on average, about four years older than private-sector workers and half have a four-year college-degree or more, compared to less than 30 percent in the private sector. Once these differences in age and education are factored in, state and local public workers earn less, not more, than their private-sector counterparts. But what about benefits?

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