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Donald Marron

Do federal workers get paid more than private ones?

According to a new study, the answer is yes. But there are a few factors that level the field.

By Guest blogger / January 31, 2012

A postal worker walks through falling snow to deliver mail in the Chinatown neighborhood of New York. According to a recent CBO report, federal workers, make more on average than theri private sector counterparts .

Mary Altaffer/AP

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Yes, according to a new report by the Congressional Budget Office. As always in such comparisons, however, there are some caveats.

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Donald B. Marron is director of economic policy initiatives at the Urban Institute. He previously served as a member of the President's Council of Economic Advisers and as acting director of the Congressional Budget Office.

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CBO summarizes its main results in this handy chart.

Report author Justin Faulk summarizes the findings as follows:

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.

Of course, a lot is riding on the phrase “certain observable characteristics.” CBO did an extremely careful job of measuring total compensation and of controlling for observable factors such as education, age, and occupation. But many other factors are impossible to measure. CBO’s summary mentions effort and motivation. There are also issues such as job security and developing valuable skills and knowledge.

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