Understanding What Has Been Happening to the Public-Sector Pay Premium in Great Britain: A Distributional Approach Based on the Labour Force Survey

This article investigates what has been happening to the public-sector wage differential in Great Britain over the period 1994–2017. The evidence indicates that apart from men in the lower part of the pay distribution, the public-sector pay premium has declined for all public-sector workers. This decline has coincided with a decline in the overall pay gap, which is associated with changes in the composition of public- and private-sector workforces. As the relative pay disadvantage experienced by public-sector workers at the top of the pay distribution has worsened over time this must raise serious concerns about the ability of the public sector to recruit and retain the staff it needs to deliver public services.     

Public- and Private-Sector Occupational Pay Structures

Data from a representative sample of wage and salary workers are used to estimate wage equations that provide for direct estimates of the differences between public and private occupational pay structures. The results show that at the state and local levels of government in particular, the public/private wage differential tends to decline as occupational skill requirements increase. Public employees who work on jobs unique to the public sector are paid a wage premium. There is little support for the idea that degree of union coverage in the private sector affects public wages for an occupation.     

Ownership and Pay in Britain

Drawing on principal–agent perspectives on corporate governance, the article examines whether employees’ hourly pay is related to ownership dispersion. Using linked employee‐workplace data from the British Workplace Employment Relations Survey 2011, and using a variety of techniques including interval regression and propensity score matching, average hourly pay is found to be higher in dispersed ownership workplaces. The premium is broadly constant across most of the wage distribution, but falls at the 95th percentile to become statistically non‐significant. This contrasts with earlier papers which indicate that higher level employees are the primary beneficiaries of higher pay from dispersed ownership. The dispersed ownership pay premium is not readily explained by efficiency wage perspectives but is consistent with a managerial desire for a ‘quiet life’.     

Britain and BrExit: Is the UK more attractive to supervisors? An analysis of the wage premium to supervision across the EU

We studied which European Union (EU) economy was more attractive prior to Brexit for employees in supervisory positions. We estimate the extra wage that supervisors earn relative to their subordinates—the wage premium to supervision (WPS)—at different quantiles of distribution of wages for 26 European economies. We find that the UK rewards supervisors more than other EU economies. Moreover, the WPS increases with wage and so increases wage inequality. Over 10% of the WPS depends on the national economic context. We discuss the implications for immigration and policymakers in relation to the post-Brexit process.     

High-Involvement Management and Pay in Britain

High‐involvement management practices have well‐established benefits for employers, but what do they do for employees? Using a nationally‐representative survey of British private‐sector workplaces, high‐involvement management is shown to be associated with higher pay. The wage premium is little affected by the choice of employee involvement practices (e.g., teams versus quality circles), but it appears only where employee involvement practices are supported by job security guarantees. Powerful trade unions increase the premium.     

Canadian Public-Private Sector Earnings Differentials, 1970–1980

This paper examines changes in the public-private sector wage gap in Canada between 1970 and 1980. The results show that the gross earnings advantage of both male and female government employees rose over the decade. For men, the increase was largely attributable to improved wage-determining characteristics, especially education, experience, and occupational distribution. For women, the increase occurred mainly because of a rise in economic rents in the form of a constant wage premium.     

The Role of Job Attributes in Understanding the Public-Private Wage Differential

This study uses a unique data set for Great Britain to investigate the impact of differences in job attributes on the public-private wage differential. The study reveals that (1) there are substantial differences in wage structure between the two sectors, particularly finding that the public-sector wage structure is less sensitive to differences in the attributes of jobs, and (2) differences in job attributes play in a major role in accounting for pay differences across sectors.     

Previous Marriage and the Lesbian Wage Premium

This paper provides insight into the wage gap between partnered lesbians and other groups of women. Using data from the 2000 Decennial Census, we find that wages of never-married lesbians are significantly higher than wages of previously married lesbians and other groups of women. Results indicate that controlling for previous marriage reduces the estimated lesbian wage premium by approximately 20 percent. Our research also reveals that wage patterns of previously married lesbians mirror those of cohabiting heterosexual women. Overall, our results are consistent with the notion that the lesbian wage premium is driven, in part, by differences in the labor-market commitment of lesbians and heterosexual women.     

The Structure of the Wage Gap for Temporary Workers: Evidence from Australian Panel Data

This study uses panel data for Australia to estimate the wage differential between workers in temporary jobs and workers in permanent jobs. It is the first study to use unconditional quantile regression methods in combination with fixed effects to examine how this gap varies over the entire wage distribution. While the wages of fixed‐term contract workers are found to be similar to those of permanent workers, low‐paid casual workers experience a wage penalty and high‐paid casual workers a wage premium compared to their permanent counterparts. Temporary agency workers also usually receive a wage premium, which is particularly large for the most well paid.     

Occupational Licensing and the Earnings Premium in the United States: Updated Evidence from the Current Population Survey

Using survey data from 2015 to 2018, this article analyses the occupational licensing wage premium in the United States. The estimates show a robust 4–6 per cent wage differential for licensed workers. This premium is robust to careful control for location/local labour market effects and occupation effects. The premium is also positive for the majority of individual occupations and groups of occupations estimated. Similar results are found using additional techniques, including a matching estimator and an analysis of border metropolitan statistical areas.     

Minimum Wage Regulation under Devolution in Northern Ireland

This paper assesses the development and functioning of regional minimum wage regulation in Northern Ireland in the interwar period under a federal form of devolution. Unlike current devolution arrangements in Scotland and Wales, this gave the Stormont Parliament powers over employment and minimum wage regulation. Northern Ireland Trade Boards were set up by the Ulster Unionist Government under the Trade Boards (Northern Ireland) Act 1923 and functioned along the same lines as those in Great Britain. Uniquely in the UK in this period, employer opposition resulted in the main Trade Board in the Irish Linen Industry being replaced by voluntary collective bargaining machinery. About one-quarter of employees were covered by minimum wage regulation, including two-thirds of females in Belfast, keeping a protective floor under low pay.     

Who Fared Better? The Fortunes of Performance Pay and Fixed Pay Workers through Recession

Using the Annual Survey of Hours and Earnings, we explore whether the fortunes of employees paid for performance differ from those of fixed pay workers during recession. Only in the bottom quintile of the wage distribution were performance pay employees more likely to experience greater falls in real wages than fixed pay employees. Accounting for fixed unobserved worker characteristics suggests that this was not due to the wage‐setting mechanism itself, but that other factors are likely to be at play. While across most of the earnings distribution there was little evidence of greater wage flexibility among performance pay employees, they did have longer job tenure than fixed pay employees over the recession.     

Measuring the Union–Nonunion Wage Gap Using Propensity Score Matching

This paper examines the union wage effect among private sector wage and salary workers using the Panel Study of Income Dynamics data. We estimate the average union premium by utilizing semi (non) parametric matching techniques, as well as by linear regression model. Our analysis reveals: (1) conditioning linearly on covariates understates the union wage effect. In addition, matching results under the alternative support conditions indicate that selection on unobservables has at most a modest impact on average. (2) Log wage estimations lead to an overstatement of the union wage effect. Solving these problems yields the union membership premium as 21.5 percent.     

Collective Bargaining in the Canadian Public Sector, 1978–2008: The Consequences of Restraint and Structural Change

We study public‐sector bargaining and contract outcomes using Canadian data from 1978 to 2008. We have a number of interesting results, but our principal findings are from our analysis of wage settlements. We find that the essential services designation, which only allows non‐essential members of a bargain unit to strike, is associated with decreases in wages. Our estimates also suggest that there is an arbitration wage premium and that making adjustments to the ability to pay criterion used by arbitrators to determine awards does not affect this premium. We also discuss the implications of our estimates.     

Temporary Help Work: Earnings,Wages, and Multiple Job Holding*

Temporary help services (THS) employment has been growing in size, particularly among disadvantaged workers. An extended policy debate focuses on the low earnings, limited benefits, and insecurity that such jobs appear to provide. We investigate the earnings and wage differentials observed between THS and other jobs in a sample of disadvantaged workers. We find lower quarterly earnings at THS jobs but a $1 per hour wage premium. We reconcile these findings in terms of the shorter duration and lower hours worked at THS jobs. We interpret the premium as a compensating wage differential.     

Rents and Quasi Rents in the Wage Structure: Evidence from Hostile Takeovers

We test whether industry-related variation in wage premium and slopes of wage profiles reflects payments of rents or quasi rents, taking our cue from the wealth-transfer hypothesis, which argues that hostile takeovers target such rents. If these wage structure characteristics reflect extramarginal payments, then hostile takeover attempts that sought to transfer wealth from workers to shareholders should have targeted firms with the highest wage premia or the steepest wage profiles. We find that the likelihood of being a hostile takeover target between 1979 and 1989 was generally unrelated to these industry-related characteristics of the wage structure.     

The Union Relative Wage Effect for Academic Librarians

This note investigates the impact of labor unions on the starting salaries of academic librarians. Using data collected from members of the Association of Research Libraries (ARL) and employing standard ordinary least squares (OLS) and seemingly unrelated regressions techniques, the union relative wage gap was estimated annually over the 1989–1998 time period. Three important results were found. First, unionized academic librarians received a positive and significant union wage premium throughout most of the decade studied. Second, this wage premium declined in magnitude over time following the trend in the economy as a whole. Lastly, by the end of the sample period, the wage effect had disappeared and was no longer significantly different from zero.     

Does Technological Change Affect Union Wage Bargaining Power?

This paper uses data from a survey of Canadian establishments to consider the effects of computer-based process technological change on wage bargaining power. The analysis finds that union wage differentials for blue-collar workers as a whole were lower among firms that had introduced process computerization than among those that had not. The relationship between technological change and the union wage premium differed, however, for skilled and unskilled labour. The union wage effect was lower for skilled workers and higher for general manual occupations in the sub-sample where process computerization had occurred. Explanations for these observed relationships appear to involve both economic and institutional components.     

A Two–Tier Wage Structure in a Nonunion Firm

This study examines the perceptions of nonunion workers in a permanent two–tier wage structure. Consistent with the predictions of equity and justice theories, low–tier employees are found to be more likely to perceive the wage structure as unfair, have lower pay satisfaction and organizational commitment, and report poorer worker–management relations than high– tier employees. These attitudes may make nonunion firms more vulnerable to certification campaigns since they are the same factors that have been repeatedly linked to employee intentions to vote for a union.     

Does Individualizing the Labor Contract Hurt Women?

The twenty‐first century has been marked by a retreat of the collective bargaining rights of public employees throughout the United States. This study exploits the variation in legal environments resulting from these reforms to estimate the causal impact of different collective bargaining policies on public employee compensation. Using data from the American Community Survey, results show a modest wage penalty at the aggregate level for employees covered by constraints on collective bargaining. However, this wage penalty is differential and is concentrated on women in all but one case—a legal environment in which collective bargaining over wages has either been prohibited or directly constricted, allowing governments to periodically institute wage freezes and caps on raises for public employees. In this case, a pre‐existing wage gap in which men earned more than women is disappearing as male and female earnings converge at a lower wage. The paper suggests that the long‐term effects of restricting collective bargaining occur through the individualization of the labor contract and should be examined along individual‐level characteristics, such as gender.