Explaining the public-sector pay gap: The role of skill and college major

Max M Schanzenbach*

*Corresponding author for this work

    Research output: Contribution to journalArticlepeer-review

    5 Scopus citations

    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, AFQTscore is not correlated with pay, and college major is only weakly predictive of pay. Furthermore, simple controls for collegemajor 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.

    Original languageEnglish (US)
    Pages (from-to)1-44
    Number of pages44
    JournalJournal of Human Capital
    Volume9
    Issue number1
    DOIs
    StatePublished - Jan 1 2015

    ASJC Scopus subject areas

    • Economics, Econometrics and Finance(all)

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