The Effect of Gender and Race Differentials on Public-Private Wage Comparisons: A Study of Postal Workers

Abstract

This study argues that the aggregative specifications often used to examine wage diferentials fail to control for important demographic variations in wage patterns. In testing how postal wages compare to wages in the private sector, the authors therefore introduce interaction terms to control for gender and race differentials by industry. Their analysis of data from the May 1979 Current Population Survey indicates that average wages are higher in the Postal Service than in many private sector industries because the Postal Service pays nonwhites and women wages similar to those it pays comparable white men, whereas gender and race differentials are common in the private sector. The findings also indicate that the postal wage for white men is about the same as the average wage paid to comparable white men in other sectors of the economy, a relationship that the authors argue should be the key criterion for wage comparability in any public agency that follows a nondiscriminatory wage policy.

Union/Nonunion Wage Gaps in the Public Sector

“…Year Coverage Excess Smith (1977b) 1975 All .02/. 03 Asher and Popkin (1984) 1979 Public Admin. .04 Perloff and Wachter (1984) 1978 Public Admin.…”

Are Public Sector Workers Paid More Than Their Alternative Wage? Evidence From Longitudinal Data and Job Queues

“…Consistent with the findings of previous researchers, the results indicate that the federal wage premium is greater for female workers (especially nonwhite female workers) than for male workers. This may reflect less discrimination in the federal government than in the private sector (Asher and Popkin 1984;Freeman 1987) or, alternatively, that the compressed government wage structure benefits female-dominated occupations relative to male-dominated occupations.…”

Progress toward Pay Equity in State Governments?

“…Position classification systems, although criticized for their red tape, make it more difficult for supervisors to discriminate (Naff ). Partly as a result, research going back to the 1970s almost consistently finds smaller pay gaps in the public than in the private sector (e.g., Asher and Popkin ; Grodsky and Pager ; Long ; Smith ; for an exception, see Choudhury ).…”

“…Among other goals, being a model employer means paying employees fairly, which includes paying women and minorities as much as equally productive white men. Governments have not achieved that goal—women and minorities earn less than white men in all sectors of the economy—but previous research suggests that the federal government, at least, made progress toward racial and gender equity through the 1990s and that race and gender pay disparities tend to be smaller in the public sector (e.g., Asher and Popkin ; Lewis , ; Long ; Smith ). Most research on the public sector has focused on the federal government, however; we know less about race and gender pay gaps in state governments (Bishu and Alkadry ), even though they employ 50 percent more workers than the federal service.…”