Do Left-wing Governments Decrease Wage Inequality among Civil Servants? Empirical Evidence from the German States

Abstract

We investigate whether left-wing governments decrease wage inequality among civil servants. The data are based on the salaries of civil servants in the German states. Since a reform in 2006, German state governments are allowed to design salaries of civil servants. We employ encompassing data for pay levels and professions including judges, professors, policemen, and administrators and distinguish between levels of operating experiences. We use six wage inequality measures comparing salaries across pay levels and operating experiences. The results do not suggest that left-wing governments were more active in decreasing wage inequality among civil servants than the center or right-wing governments. Cabinet members are civil servants themselves and decide on their own salaries: government ideology is also not shown to predict the salaries of cabinet members. Because left-wing governments are perceived as taking action against income and wage inequality, future research should employ data from other federal states such as the United States to examine how government ideology influences the salaries of civil servants.

A Snapshot of Public Finance Research from Immediately Prior to the Pandemic: IIPF 2020

“…Empirical Evidence Based on Salaries of Civil Servants. Kauder et al (2020) focus on policy makers rather than on a particular policy. Members of German state governments have the ability to set pay structures for certain types of civil servants, including police officers and judges.…”