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Comparing Compensation for Federal and Private-Sector Workers: An Overview

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CRS – Comparing Compensation for Federal and Private-Sector Workers: An Overview – David H. Bradley, Specialist in Labor Economics – July 30, 2012

  • “Of the five studies under review, one reports an overall average wage penalty for federal workers (PPA), one reports neither an overall average wage premium nor a penalty for federal workers, and three find overall average wage premia for federal workers compared to private sector workers. Only two of the studies — CBO and the American Enterprise Institute (AEI) – report earnings differentials by level of educational attainment, however. While the AEI report shows a clear wage premium across levels of educational attainment, the more methodologically rigorous CBO study finds a more nuanced outcome. That is, federal workers with less than a bachelor’s degree have on average a wage premium compared to private sector counterparts, while federal workers with post-graduate educational attainment on average experience a wage penalty relative to private sector counterparts.”
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