The public sector pay premium and compensating differentials in the New Zealand labour market

Abstract

In this note, propensity score matching (PSM) methods are applied to data from the 2005 International Social Survey Program Work Orientations (ISSP-WO) survey to examine the public sector pay premium in New Zealand. Taking account of a wide range of worker characteristics and attitudes, job attributes, and the effects that jobs have on workers and their family life, there appears to be a pay premium from working in the public sector of 17 to 21 percent.