This research paper presents an econometric analysis of the public/private sector pay differential for the period 2015 to 2018 and has been prepared in response to user needs to inform discussions relating to the composition of earnings.
The methodology employed in this analysis is the same as that used by the Central Statistics Office to produce the analysis for years 2011-2014 (see References). A combination of available survey data and administrative data sources has been used. The sources used are the CSO’s Labour Force Survey (LFS) and the Earnings Analysis using Administrative Data Sources (EAADS).
The methods used in these analyses are: Ordinary Least Squares Regression (OLS); and Quantile Regression. For each of these methods, results based on a range of specifications are presented.
Results from the OLS Regression model show a public/private sector pay differential ranging from 6.8% in 2015 to -0.3% in 2018, for the model which includes size of enterprise as a determining factor. Results for the OLS model which deducts the pension levy and excludes size shows a pay differential ranging from 1.4% to -3.4%. See Table 4.1.
Summary results from the Quantile Regression model show a public/private sector pay differential in 2018 ranging from 12.7% at the 10th percentile to -17.3% at the 90th percentile for the model which deducts the pension levy and includes size of enterprise as a determining factor. See Figure 4.1 and Table 8.8. The corresponding model which makes no adjustment for the pension levy and excludes size shows a pay differential in 2018 ranging from 17.6% at the 10th percentile to -13.7% at the 90th percentile. See Table 8.4.
CSO research paper, 15 November 2019, 11am