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

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  • Max Schanzenbach
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.

Suggested Citation

  • Max Schanzenbach, 2015. "Explaining the Public-Sector Pay Gap: The Role of Skill and College Major," Journal of Human Capital, University of Chicago Press, vol. 9(1), pages 1-44.
    • Handle: RePEc:ucp:jhucap:doi:10.1086/680596
    DOI: 10.1086/680596
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    References listed on IDEAS

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    Cited by:

    1. Rattsø, Jørn & Stokke, Hildegunn E., 2019. "Identification of the private-public wage gap," Labour Economics, Elsevier, vol. 59(C), pages 153-163.
    2. Michael R. Richards & Coady Wing, 2019. "Recruiting and retaining dental labor in federal facilities: Harder than pulling teeth?," Health Economics, John Wiley & Sons, Ltd., vol. 28(11), pages 1356-1369, November.
    3. Rattsø, Jørn & Stokke, Hildegunn E., 2020. "Private-public wage gap and return to experience: Role of geography, gender and education," Regional Science and Urban Economics, Elsevier, vol. 84(C).

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