Earnings of public sector and private sector employees in Australia: is there a difference?

Abstract

This study examines differences in average weekly earnings between public sector and private sector employees in Australia. In the 1990s average weekly earnings of full-time public sector employees were higher than for full-time private sector employees by 10 to 15 per cent for males and 20 to 25 per cent for females. A variety of decomposition tests are applied to examine the sources of this inter-sector difference in average weekly earnings. The tests generally show that higher average weekly earnings of public sector employees are wholly explained by inter-sector differences in productivity-related characteristics of employees and job characteristics in each sector.