Pay and Job Quality: Is the Grass Greener in the Public Sector?

The unadjusted public-private sector pay differential has attracted considerable political interest since the coalition government came to power in the UK in 2010. It has been used to justify changes to pay setting arrangements and the imposition of pay restraint on the public sector. However, previous analyses have shown that a large part of the premium can be explained by differences in individual and employment characteristics. This chapter took that approach a step further by additionally examining sector differences in the intrinsic quality of work which may further contribute to explaining the pay gap. To do so, it drew on the Skills and Employment Survey series carried out in 1997, 2001, 2006 and 2012. Using the data contained in these surveys, the chapter challenged the suggestion that working in the public sector attracts a ‘double premium’ of better pay and better quality jobs. It suggested instead that pay differentials compensate for differences in the characteristics of work and its intrinsic features.