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Devolved government and public sector pay reform: Considerations of equity and efficiency

Author

Listed:
  • Robert Elliott
  • David Bell
  • Anthony Scott
  • Ada Ma
  • Elizabeth Roberts

Abstract

Elliott R. F., Bell D., Scott A., Ma A. and Roberts E. (2005) Devolved government and public sector pay reform: considerations of equity and efficiency, Regional Studies 39 , 519-539. Public sector pay is of critical concern to the governments in Westminster and Edinburgh. It accounts for the major part of these government's current expenditures and is a crucial determinant of the quality and range of the services they provide. The paper details the current arrangements for setting public sector pay. It is shown that these mechanisms are, for the most part, UK wide and that they result in national rates of pay that reveal little sensitivity to specific labour market conditions in Scotland. In consequence, in Scotland, public sector workers toward the lower end of the distribution of pay are now significantly better paid than their private sector counterparts while those at the upper end are now paid about the same. The paper uses data from the Labour Force Survey for 1996-2002 to establish these results. It uses these same data to forecast the changes in pay inequality in the Scottish public sector that would result from a reform of public sector pay setting institutions that aimed to bring rates of pay in the public sector into line with those in the private sector in Scotland.

Suggested Citation

  • Robert Elliott & David Bell & Anthony Scott & Ada Ma & Elizabeth Roberts, 2005. "Devolved government and public sector pay reform: Considerations of equity and efficiency," Regional Studies, Taylor & Francis Journals, vol. 39(4), pages 519-539.
    • Handle: RePEc:taf:regstd:v:39:y:2005:i:4:p:519-539
    DOI: 10.1080/00343400500128655
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    References listed on IDEAS

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    1. Andrew Henley & Dennis Thomas, 2001. "Public Service Employment and the Public- Private Wage Differential in British Regions," Regional Studies, Taylor & Francis Journals, vol. 35(3), pages 229-240.
    2. Richard Disney & Amanda Gosling, 1998. "Does it pay to work in the public sector?," Fiscal Studies, Institute for Fiscal Studies, vol. 19(4), pages 347-374, November.
    3. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-442, June.
    4. David Metcalf, 2004. "The impact of the national minimum wage on the pay distribution, employment and training," Economic Journal, Royal Economic Society, vol. 114(494), pages 84-86, March.
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    Citations

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    Cited by:

    1. Axel Heitmueller, 2006. "Public-private sector pay differentials in a devolved Scotland," Journal of Applied Economics, Universidad del CEMA, vol. 9, pages 295-323, November.
    2. Jürgen, Göbel, 2009. "How can the Power of Leviathans be Measured?," MPRA Paper 13663, University Library of Munich, Germany.
    3. Björn Kauder & Manuela Krause & Niklas Potrafke, 2018. "Electoral cycles in MPs’ salaries: evidence from the German states," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 25(4), pages 981-1000, August.

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    More about this item

    Keywords

    Public sector pay; National pay rates; Public sector employees; Scotland; Devolution; Salaires du secteur public; Taux de salaire nationaux; Salaries du secteur public; Ecosse; Decentralisation; Besoldung im offentlichen Sektor; Uberregionale Satze der Bezahlung; Im offentlichen Sektor Erwerbstatige; Schottland; Machtubertragung; Salarios de los funcionarios; Indices nacionales de salarios; Funcionarios; Escocia; Descentralizacion; JEL classifications: J3; J4; J5;
    All these keywords.

    JEL classification:

    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J4 - Labor and Demographic Economics - - Particular Labor Markets
    • J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining

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