Published: January 2014
Author(s): David Blackaby, Alan Felstead, Melanie Jones, Gerald Makepeace, Philip Murphy, Victoria Wass

The unadjusted public-private sector pay differential has attractedconsiderable political interest since the coalition government came to powerin the UK in 2010. It has been used to justify changes to pay settingarrangements and the imposition of pay restraint on the public sector.However, previous analyses have shown that a large part of the premium canbe explained by differences in individual and employment characteristics.This chapter takes that approach a step further by additionally examiningsector differences in the intrinsic quality of work which may further contributeto explaining the pay gap. To do so, it draws on the Skills and EmploymentSurvey series carried out in 1997, 2001, 2006 and 2012. Using the datacontained in these surveys, the chapter challenges the suggestion thatworking in the public sector attracts a 'double premium' of better pay andbetter quality jobs. It suggests instead that pay differentials compensate fordifferences in the characteristics of work and its intrinsic features.

Keywords
Labour Market, Public Sector
The unadjusted public-private sector pay differential has attractedconsiderable political interest since the coalition government came to powerin the UK in 2010. It has been used to justify changes to pay settingarrangements and the imposition of pay restraint on the public sector.However, previous analyses have shown that a large part of the premium canbe explained by differences in individual and employment characteristics.This chapter takes that approach a step further by additionally examiningsector differences in the intrinsic quality of work which may further contributeto explaining the pay gap. To do so, it draws on the Skills and EmploymentSurvey series carried out in 1997, 2001, 2006 and 2012. Using the datacontained in these surveys, the chapter challenges the suggestion thatworking in the public sector attracts a 'double premium' of better pay andbetter quality jobs. It suggests instead that pay differentials compensate fordifferences in the characteristics of work and its intrinsic features.