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Overpaid or underpaid? A state-by-state ranking of public-employee compensation

Andrew Biggs (andrew.biggs@aei.org) and Jason Richwine

AEI Economics Working Papers from American Enterprise Institute

Abstract: This paper ranks all 50 states according to how costly their public-employee compensation packages are relative to private-sector standards. Each state's package is placed into one of five categories: modest penalty, market level, modest premium, large premium, or very large premium. The results show that national-level analyses obscure significant differences in compensation from state to state. Connecticut, for example, pays its state employees 42 percent more than what similar private-sector workers receive, but Virginia pays its state workers about 6 percent less. State-by-state political interest in public-sector pay aligns fairly well with our results: In states where public sector pay is an active political issue, state government employees appear to be better compensated than similarly-skilled private sector workers. In states where state government compensation is at or below market levels, pay for public employees is generally less controversial.

Keywords: Public Pensions; Policy Papers (search for similar items in EconPapers)
JEL-codes: A (search for similar items in EconPapers)
Date: 2014-04
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:aei:rpaper:415891

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