Is there a public sector earnings premium in UK healthcare?

Abstract

Using data from the Annual Survey of Hours and Earnings, we provide the first estimates of intra-occupation sectoral hourly remuneration differentials in Britain. Focusing on healthcare, we find that public sector remuneration differentials for comparable workers vary substantially across occupations, with benchmark estimates from a premium of 34 per cent for care workers to no significant differential for medical secretaries. This variation, as well as differences in trends in intra-occupational estimates, illustrates the insights from intra-occupation estimates for government pay setting. Indeed, in stark contrast to national estimates of a relatively small public sector differential, we find sizeable and robust public sector premiums for doctors, auxiliary nurses and care workers.