Are federal government workers overpaid?

Greg Mankiw:

Yes, says CBO:

Differences in total compensation—the sum of wages and benefits—between federal and private-sector employees varied according to workers’ education level.

  • Federal civilian employees with no more than a high school education averaged 36 percent higher total compensation than similar private-sector employees.
  • Federal workers whose education culminated in a bachelor’s degree averaged 15 percent higher total compensation than their private-sector counterparts.
  • Federal employees with a professional degree or doctorate received 18 percent lower total compensation than their private-sector counterparts, on average.

Overall, the federal government paid 16 percent more in total compensation than it would have if average compensation had been comparable with that in the private sector, after accounting for certain observable characteristics of workers.