The Public-Private Sector Earnings Gap in Australia: A Quantile Regression Approach

This paper investigates the public-private sector earnings gap for Australian men. It finds that the average earnings of men working in the public sector are larger than the earnings of men employed in the private sector. The difference in the earnings of public and private sector workers is slightly larger for those working in the federal government sector than for those working in the state/local government sector. Using a quantile regression approach, the paper also finds that the wage premium for public sector employment varies substantially along the earnings distribution, with low-paid workers having the largest wage advantage from employment in the public sector. Employment in the public sector has a negative impact on the wages of high-paid workers.