The federal government pays its employees more than they would earn in the private sector. Economic studies consistently find that federal employees enjoy both higher pay and substantially higher benefits than comparable private-sector workers.

Alan Krueger, the former Chairman of President Barack Obama’s Council of Economic Advisers, documented this pay premium in the 1980s.[1] Academic researchers have repeatedly found similar results.[2] More recently, researchers at the Congressional Budget Office (CBO),[3] The Heritage Foundation,[4] and the American Enterprise Institute (AEI)[5] re-examined this question. These studies examined different data sources and used different econometric models. They all concluded that the federal pay premium remains considerable—particularly when including employee benefits. Table 1 highlights their results. Read More