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Public-Private Pay Gap: Study of Workers Switching Employment |
Numerous studies, including two separate analyses by The Heritage Foundation, have concluded that federal workers do receive a substantial wage premium. Most of these studies have used the cross-sectional human capital method, which compares federal workers to private workers who have the same skills. The cross-sectional method is not perfect, however, and supplemental analyses can be useful in confirming its results. Rather than comparing workers at a single point in time, this report follows individual workers as they switch between the federal and private sectors. It finds that workers who change jobs receive a substantially larger raise when they switch into federal employment rather than into another private job. This result corroborates the findings of the cross-sectional studies, providing further evidence that federal workers enjoy a wage premium.
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