September 2010, Jeffrey Thompson and John Schmitt

Recent reports in the national and the regional media have described state and local government employees as earning more than workers in the private sector. The average state and local government worker does earn higher wages – but this is because they are, on average, older and substantially better educated than private-sector workers. When state and local government employees are compared to private-sector workers with similar characteristics – particularly when workers are matched by age and education – state and local workers actually earn less, on average, than their private-sector counterparts. On this basis, the wage penalty for state and local government workers in New England is close to 3 percent.

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