Women win in public sector pay

THE PUBLIC sector pays better than the private sector, with women faring particularly well, according to a study released yesterday.

However, "Public Pay in the 1990s", a report by the Institute for Fiscal Studies (IFS), finds that the differential between public sector and private sector pay has narrowed over the past two decades, largely because of structural changes in the economy such as privatisation and declining union coverage.

Women, especially those with school-leaving qualifications - that is, O-levels/GCSEs - do best out of working in the public sector.

The reports finds that women working in the civil service earn 25 per cent more than private-sector counterparts, while women working in the National Health Service and higher education earn a "public sector wage premium" of 23 per cent.

Overall, women employed in the public sector earn 8 per cent more than counterparts in the private sector, the IFS says, although this differential is far smaller than it used to be.

In the early 1980s women in the public sector earned 16 per cent more than those in the private sector.

The authors of the report - Richard Disney, Alissa Goodman, Amanda Gosling and Chris Tinder - say: "Women seem to do rather better in the public sector than the private sector, which we believe stems from the wider range of occupations available in the public sector to women with school- leaving qualifications, such as teaching and nursing."

The study found that highly-qualified men fare poorly in the public sector. Male degree holders in the public sector earn 6 per cent less than private- sector counterparts, while men working in the national health service and higher education pay a "public sector wage penalty" of more than 8 per cent.

Overall, men in the public sector earn roughly the same as their private- sector counterparts. Fifteen years ago, the public-private sector wage differential for men was 8 per cent.

Other losers in the public sector are men and women with no qualifications. Unqualified men in the public sector now earn the same as private-sector counterparts, according to the study. In 1983, they earned a wage premium of just less than 5 per cent.

Public sector workers tend to fare better in recessions than those in the private sector, but do worse during economic booms when private sector pay rises faster than does public sector pay.