Public wage differentials and the treatment of occupational differences

Abstract

Past research demonstrates that the estimated size of the federal government earnings differential shrinks substantially with the addition of detailed occupational controls. Possible explanations for this reduction are: controlling for the differing sectoral distributions of common occupations, and controlling for detailed occupations unique to each sector. While occupational detail does not eliminate the federal differential, more than two-thirds of the reduction in the federal differential comes from controlling for unique occupations and, moreover, this is equivalent to excluding all observations in unique occupations. This finding is contrasted with that for the local sector in which the differing distribution of common occupations largely explains the pattern of the differential. © 2004 by the Association for Public Policy Analysis and Management.

Comparing Federal and Private‐sector Wages Without Logs

“…However, the higher wages paid by larger private employers may not entirely reflect pay for skills that are transferable between the federal and private sectors. I suspect that controlling for firm size does not completely account for the girth of federal employers, as Brown and Medoff (1989) find that establishment size is also strongly associated with higher wages even when controlling for firm size, and Belman and Heywood (1990) find that federal employees tend to work at larger establishments. I do not test the sensitivity of the analysis to controlling for establishment size, which is no longer recorded by the CPS.…”

“…The inclusion of an indicator for union membership has little effect on the estimate for the intersector wage differential, largely because the rate of union membership is only about 13 percentage points higher in the federal sector (see Table , columns (6) and (5)). A worker's occupation is typically viewed as indicative of transferable skills, but Belman and Heywood () find that controlling for detailed occupational classifications in a regression results in about 10% of workers receiving no weight because they are in jobs that are unique to a particular sector. In the main analysis, I use broad occupational groups, but the results change little when controlling for three‐digit occupational classifications as over 95% of workers in my sample have intersector counterparts in the same detailed occupation.…”

Does Public or Not-for-Profit Status Affect the Earnings of Hospital Workers?

“…Also, similar to the private nonprofit sector, since public sector hospitals tend to have a much higher proportion of uncompensated care (both bad debt and charity care) than do private sector hospitals, it could be that public hospitals attract workers who are also more willing to "donate" a portion of their wage to help fulfill the mission of the organization. Belman and Heywood (2004) examine the "positions" vs. "people" problem in estimating the public/private wage differential. They first examine the differential when restricting the data set to include only workers in occupations common to both the public and private sectors, they then estimate the differential restricting the data to occupations unique to each sector.…”

A comparison of the wage structure between the public and private sectors in Japan

“…To address this issue, analyses with detailed control of occupations (Moulton, 1990;Belman and Heywood, 2004a; Gittleman and Pierce, 2012a) and two-stage estimations using a selection model or a switching regression method (Gyourko and Tracy, 1988;van Ophem, 1993;Dustman and van Soest, 1998;Bender, 2003;Lee, 2004) have been conducted. More recently, Maczulskij (2013) estimated wage gaps between public and private sector employees by applying a within twin pair method for identical twins that was able to control for unobserved ability.…”