publication . Article . 2015

Explaining the Public-Sector Pay Gap: The Role of Skill and College Major

Max Schanzenbach;
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  • Published: 01 Jan 2015 Journal: Journal of Human Capital, volume 9, pages 1-44 (issn: 1932-8575, eissn: 1932-8664, Copyright policy)
  • Publisher: University of Chicago Press
Abstract
This paper reassesses the public-sector pay gap using AFQT score and college major as measures of skill. Among the college educated, there is strong evidence that those with lower skills enter the public sector. In contrast to the private sector, for college-educated public-sector workers, AFQT score is not correlated with pay, and college major is only weakly predictive of pay. Furthermore, simple controls for college major explain most of the public-private-sector pay gap. I conclude that the public-sector pay gap is much smaller than previously estimated and pay rigidities cause significant skill-based selection between the sectors.
Subjects
free text keywords: Labour economics, Private sector, Public sector, business.industry, business, Economics
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publication . Article . 2015

Explaining the Public-Sector Pay Gap: The Role of Skill and College Major

Max Schanzenbach;