Who Earns More: Private or Public Workers?

Mouhcine Guettabi and Andrew Bibler, both assistant professors of economics at ISER, recently compared the paychecks of people in private and public sector jobs in Alaska. Using Alaska Department of Labor data from 2001 through 2016, they found:

• Average earnings are higher in the private than the public sector. That’s because men earn more than women, and men make up a bigger share of private workers—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.

Download Public and Private Sector Earnings in Alaska (PDF, 619.3KB), prepared for the Alaska Department of Administration, by Mouhcine Guettabi and Andrew Bibler. If you have questions, get in touch with Mouhcine Guettabi at mguettabi@alaska.edu or 907-786-5496 or Andrew Bibler at ajbibler@alaska.edu or 907-786-5452.

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