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.