ECONOMIC INSIGHTS

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CAN WE EXPLAIN THE GAP

BETWEEN PUBLIC AND

PRIVATE SECTOR WAGES?

A common criticism of measuring the public/private

sector pay gap is that it does not compare workers

on a like-for-like basis. Some jobs such as members

of the defence forces and An Garda Síochána do

not exist in the private sector. There are also other

differences in their characteristics: public sector

workers tend to be older, have longer length of

service, are more likely to be a member of a trade

union and have a third-level degree.

Table 5: Average characteristics of public and private sector employment in Ireland

Public

Private

Age (years) 43 39

Length of service with current employer (years) 15 9

Hours worked per week 37 40

Trade union membership, % total 79% 19%

Shift Worker, % total 20% 16%

Third-level degree or higher qualification, % total 38% 23%

Source: Central Statistics Office, National Employment Survey 2010

The extent of the public/private pay gap in Ireland

has been the subject of many economic studies.

These studies aim at finding characteristics that

explain the public/private sector pay gap such as

higher education levels or qualifications among

public sector workers. The part of the 40% pay

gap that cannot be explained is referred to as the

‘underlying’ pay premium after accounting for

differences in characteristics.

Table 6: Estimates of Ireland’s public/private pay premium

Boyle, McElligot and O’Leary (2004) 13%

Murphy, Ernst and Young (2007) 10%

Kelly, McGuinness and O’Connell (2009) 26%

Foley & O’Callaghan (2009) 10%-21%

European Central Bank (2011) 19%

Central Statistics Office (2012) 6%-19%

Kelly, McGuinness and O’Connell (2012) 17%

European Commission (2013) 21%

Central Statistics Office (2017) 5%

Source: Davy

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