Who Earns More: Private or Public Workers?

Research Matters No. 109. Who Earns More: Private or Public Workers?  Mouhcine Guettabi and Andrew Bibler, both assistant professors of economics at ISER, recently looked at how the paychecks of people who work for private businesses in Alaska compare with those of people who work for state and local governments here. Using Alaska Department of Labor data from 2001 through 2016, they found:   • Average earnings are higher in the private than the public sector, across all occupations. That's because men earn more than women, and men make up a bigger share of the private work force—55%, compared with 43% in the public sector.     • Men who work for state and local governments earn on average about $2,000 less per quarter than men working for private businesses. The reason why is that overall, men who take public-sector jobs start out at considerably lower wages—and their wages don't catch up over time, even though they increase somewhat faster than private wages.   • Women working for state and local governments earn on average about $500 more per quarter than women in private-industry jobs. That's because overall, the starting salaries for women in public and private jobs are similar, and salaries for women in public-sector jobs grow faster as they spend time in their jobs.   • But for individual occupations, there is considerable variation in these overall patterns, among both men and women. For some occupations, the gap between public and private pay is larger or smaller to start with, and it can narrow or widen after people have been in their jobs for years.  Download Public and Private Sector Earnings in Alaska (PDF, 619.3KB), prepared for the Alaska Department of Administration, by Mouhcine Guettabi and Andrew Bibler.