NCPA - National Center for Policy Analysis

Comparing the Compensation of Federal and Private-Sector Employees

February 1, 2012

A new study from the Congressional Budget Office (CBO) compares federal civilian employees and private-sector employees with certain similar observable characteristics.  The analysis focuses on wages, benefits and total compensation between 2005 and 2010.

  • Federal civilian workers with no more than a high school education earned about 21 percent more, on average, than similar workers in the private sector.
  • Workers whose highest level of education was a bachelor's degree earned roughly the same hourly wages, on average, in both the federal government and the private sector.
  • Federal workers with a professional degree or doctorate earned about 23 percent less, on average, than their private-sector counterparts.

The cost of providing benefits -- including health insurance, retirement benefits and paid vacation -- differed more for federal and private-sector employees than wages did, but measuring benefits was also more uncertain.

  • Average benefits for federal workers with no more than a high school diploma were 72 percent higher than for their private-sector counterparts.
  • Average benefits for federal workers whose education ended in a bachelor's degree were 46 percent higher than for similar workers in the private sector.
  • Workers with a professional degree or doctorate received roughly the same level of average benefits in both sectors.

Differences in total compensation -- the sum of wages and benefits -- between federal and private-sector employees also varied according to workers' education level.

  • Federal civilian employees with no more than a high school education averaged 36 percent higher total compensation than similar private-sector employees.
  • Federal workers whose education culminated in a bachelor's degree averaged 15 percent higher total compensation than their private-sector counterparts.
  • Federal employees with a professional degree or doctorate received 18 percent lower total compensation than their private-sector counterparts, on average.

Overall, the federal government paid 16 percent more in total compensation than it would have if average compensation had been comparable with that in the private sector, after accounting for certain observable characteristics of workers.

Source: "Comparing the Compensation of Federal and Private-Sector Employees," Congressional Budget Office, January 2012.

For text:

http://www.cbo.gov/doc.cfm?index=12696

 

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