Public Sector Earnings Comparability: Alternative Estimates for the U.s. Postal Service

Using the postal service as an example, the critical role played by a series of "implicit" judgments when estimating the government earnings differential is highlighted. Regression estimates demonstrate that alternative treatments of location, gender, industry, occupation and union status result in estimates ranging from a double digit advantage for postal workers to no advantage at all. It is shown that women employees and those in rural locations generate substantial positive postal differentials, while the differentials for men and urban employees are very modest. Ignoring this point and making policy based on the average differential is unlikely to be effective. It is argued that the standard of comparability, comparing similar workers doing similar work, requires that judgments about samples and controls be made explicit as they largely determine the resulting estimates.