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The Wage Penalty for State and Local Government Employees in New England
Abstract:
The authors demonstrate that the average state or local government worker earns higher wages than the average private-sector workeróbut only because they are, on average, older and substantially better educated.

More than half of state and local government employees in New England have a four-year college degree or more, and 30% have an advanced degree. By contrast, only 38% of private-sector workers have a four-year college degree or more; and only 13% have an advanced degree.

The wage gap becomes more significant at higher-paid professional levels. The lowest paid government workers do earn slightly more than their private counterparts, but for high-wage workers, the wage penalty for working for a New England state or local governments rises to almost 13%. And while state and local workers on average do indeed receive more valuable benefits than private-sector workers, the difference only reduces the wage penalty for the average state and local government worker.

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