Assessing the wage gap between public and private sector employees in Ireland: issues, evidence and challenges

Over recent years pay levels in the public sector of the economy have come under increasing scrutiny. This paper provides an assessment of the key issues and challenges central to a comparison of wage levels in the private and public sector in Ireland. A review of the extant studies that have employed multivariate analysis to estimate the gap between public and private sector wages in Ireland indicates a wage premium in favour of public sector workers. However the actual magnitude of the earnings gap is difficult to accurately assess as the size of the premium varies markedly across these various studies. A number of possible options are suggested to guide the development of a fair system for assessing wage levels in the public sector.