Industrial Relations in Europe 2012 - European Commission - Europa

involving experts from five countries who have produced five national reports listed in the
references. 38
A meta-analysis of the results of a sample of decomposition studies comparing public and
private sector pay reveals significant inter-country differences in public-private pay patterns.
The results suggest a public sector pay premium at the median wage for men and women in
France and the UK and for women only in Germany, but a public sector pay penalty in
Hungary and Sweden. Of particular interest is evidence of pay gaps among the lower paid
(table 3.10). Quantile regression studies suggest those countries with public sector pay
premiums at the median experience even higher premiums among the lower paid, especially for
women (although for female part-timers in the UK the public sector premium increases with
the level of pay). In Sweden the size of wage penalty among public sector workers is fairly
consistent along the pay distribution, while in Hungary both sectors tend to pay the minimum
wage at the bottom (possibly with a higher incidence of minimum wage workers in the public
sector) and there are large pay penalties for professional groups.
Evidence from local government case studies in France, Germany, Hungary, Sweden and the
UK tests the extent to which this portrayal of pay gaps is a realistic reflection of the
experiences of procurement. The evidence is mixed (table 3.10).
Table 3.10: Comparing decomposition results with case-study evidence on the public
sector pay premium
Summary results of decomposition studies
Public sector pay
premium at the
median wage?
Larger premium for
the lower paid?
Local government case-study evidence
Private sector
contractors offer
lower pay?
Worse private sector
pay a cause of union
resistance to
outsourcing?
France Yes Yes (larger for women) No No (some examples of
resistance to insourcing)
Germany Yes for women only Yes (large for women,
small for men)
Hungary No (penalty since 2007,
but premium during
2002-6)
No (higher low pay
incidence in public
sector)
Sweden No No (similar sized
penalty at all wage
levels)
Yes (although the gap
has reduced)
UK Yes Yes (larger for women) Yes Yes
Source: Grimshaw et al. (2012)
In France, the case studies in fact paint a picture of better conditions among private contractors
than in local government and reluctance among employees to move back into local government
despite some political initiatives within municipalities to insource services. Nevertheless, the
picture is complicated by the presence of varying public-private organisational forms and
differences in public and private employment law. An example of outsourced school catering
records better pay prospects for the catering workers in a public-private organisation (with
No
No
Yes
No
No
38 Project reference VS/2011/0141, ‘Public sector pay and social dialogue during the fiscal crisis: the effects of pay
reforms and procurement strategies on wage and employment inequalities’, co-ordinated by Damian Grimshaw.
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