Does it Pay to Work in the Public Sector? Evidence from Three Decades of Econometric Analyses

Evidence suggests there were some large positive pay premiums in the UK public sector between the 1970s and early 1980s, but by the end of the 1990s only female public sector workers benefited from working in the public sector. The gradual erosion of other traditional benefits of working in the sector, such as greater job security and more generous pension entitlements, reinforces this conclusion. In addition to indicating where further research is required, this article presents a full taxonomy of the econometric results and addresses New Labour's renewed emphasis on regional pay (to reflect the regional cost of living) that should be of interest to practising managers concerned with recruitment, retention and motivation of public sector employees.