Comparing Public and Private Earnings Using State Wage Surveys1

Abstract

This paper shows how state wage surveys can be used to compare the earnings of public and private sector workers within states. This subject of long-running interest to economists has generated a complex and sometimes contradictory set of empirical results. Surprisingly little, if any, of this academic work has used the publicly available wage surveys that many states routinely collect. This paper serves as an introduction to such surveys and an application of the Wisconsin State Wage Survey for the purpose of comparing public and private compensation. While the evidence generally indicates public earnings are higher, we are careful to point out the limitations of our methodology which suggests this conclusion is incomplete.