Bloated Bureaucrats or Underappreciated Public Servants? How Do Public and Private Sector Wages Compare in Alberta?

Abstract

This communiqué is based on the following paper: Public Sector Wages in Alberta: How do these Compare to Other Provinces and to the Private Sector? by Richard E. Mueller Are public sector workers in Alberta over paid? Or are they perhaps just the target of resentment from private sector workers, many of whom have lost their jobs and incomes in the past few years as the energy sector has shed thousands of positions? This communique summarizes the main results in Mueller (2019) concerning the size of the public sector wage premium, which is the percentage difference between the earnings of workers in the public and private sectors. To determine whether there is public sector wage premium and its size, it is necessary to compare the wages and salaries of public sector workers with private sector workers with similar characteristics, such as education and age, and that work in industries that overlap both the private and public sectors. The Mueller study uses state-of-the-art econometric techniques and data on individuals’ earnings from Statistics Canada’s Labour Force Survey from January 2006 to December 2017. The database for Alberta contains 678,563 hourly wage observations over the 12-year period.