Comparing Government and Private Sector Compensation in Atlantic Canada

Main Conclusions

• Using data on individual workers from January to December 2018, this report estimates the wage differential between the government and private sectors in the Atlantic provinces. It also evaluates four non-wage benefits for which data are available to quantify differences in the compensation offered by the two sectors in these provinces.
• After controlling for factors like gender, age, marital status, education, tenure, size of firm, job permanence, immigrant status, province, industry, occupation, and full- or part-time status, the authors found that government-sector workers (federal, provincial, and local) in the Atlantic provinces enjoyed an 11.9% wage premium, on average, over their private-sector counterparts in 2018. When the wage difference between unionized and non-unionized workers is taken into account, the wage premium for the government sector declines to 6.3%.
• Available data on non-wage benefits suggest that the government sector enjoys an advantage over the private sector. For example, public-sector workers in all Atlantic provinces are much more likely to be covered by a registered pension plan (RPP): fewer than 3 in 10 private-sector workers were covered by an RPP in 2018 compared to more than 8 in 10 workers in the public sector. Of those covered by an RPP, the share of defined benefit pension is much higher in the public sector than the private sector in all Atlantic provinces except New Brunswick.
• In addition, government workers retire earlier than those in the private-sector—between 2.3 years (New Brunswick) and 4.2 years (Newfoundland & Labrador) earlier on average—and were 6 to 7 times less likely to lose their jobs in 2018.
• Moreover, full-time workers in the government sector lost more work time in 2018 for personal reasons (from 12.7 days to 15.6 days on average) than their private-sector counterparts (from 8.2 to 9.4 days).