Finding Answers to the Public Compensation Question

Source: Andrew G. Biggs and Jason Richwine, Public Administration Review, Volume 72, Issue 6, November/December 2012
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Recent empirical evidence strongly suggests that, on average, combined wages and benefits for public sector workers now outstrip compensation for comparable private sector workers. The most obvious implication of this imbalance is that public money is being used inefficiently. The compensation disparity poses an even greater problem for public administrators, however, who risk losing legitimacy in the eyes of voters and taxpayers. People want to know that government employment is truly public service–not a gateway to special privileges.

Elected officials and other policy makers need to get compensation right, and the first step is measuring it accurately. Here we describe strategies that economists have used to compare public and private compensation….

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