Public Sector Workers and Job Security

Publication Date: May 2013

Publisher: Center for Retirement Research at Boston College

Author(s): Alicia H. Munnell; Rebecca Cannon Fraenkel

Research Area:

Keywords: public sector; job security; state and local pensions

Type: Report

Coverage: United States

Abstract:

One issue that comes up in discussions of compensation of state/local workers is their job security relative to that of workers in the private sector. Several questions arise in this regard. How much more secure are public sector jobs? Has their relative security declined in the Great Recession? Do different types of public sector workers fare differently? And how should greater job security be incorporated in the calculus of relative compensation? This brief addresses these issues.

The discussion proceeds as follows. The first section presents data on the employment of state/local workers and private sector workers over the last three business cycles. It indicates that, despite declines in employment that have not yet fully abated, state/local workers fared somewhat better relative to private sector workers during this recession than in the past. The second section presents regression results on the relative job layoff experience of state/local workers between 1990-2007 and 2008-12, which quantifies the difference in job security between state/local workers and private sector workers in the two periods. The third section looks at teachers, non-teacher state workers, and non-teacher local workers separately to see how their employment levels have varied over time. At first, it looks like teachers fared better than non-teachers, but the regression analysis, which focuses on layoffs and controls for education, shows that teachers have no more job security than other public employees. The fourth section briefly discusses alternative ways of thinking about job security in the context of relative compensation considerations.

The final section concludes that – due to the nature of the public sector – state/local workers have historically had greater job security than private sector workers, and that relationship continued through the Great Recession. Some argue that job security should be quantified and added to comparisons of public and private compensation. Our view is that while job security is attractive, other non-monetary factors make public sector jobs less attractive. Even if these negative factors are ignored, however, estimates of the value of job security suggest that it is not large enough to overturn the conclusion that state/local and private sector workers receive about the same compensation.