Attachment 5

CONGRESS OF THE UNITED STATES
CONGRESSIONAL BUDGET OFFICE

CBO
Comparing the
Compensation of
Federal and
Private-Sector
Employees,
2011 to 2015

Average Federal
Benefits

Average Private-Sector
Benefits

Average Federal
Wages

Average Private-Sector
Wages

High
School
Diploma
or Less

Some
College

Bachelor’s
Degree

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Master’s
Degree

Professional
Degree or
Doctorate

Notes
Numbers in the text, tables, and figures of this report may not add up to totals because
of rounding. For the same reason, the percentage differences shown in some of the tables
may not correspond precisely to the dollar amounts shown.
Unless otherwise indicated, the numbers in the tables and figures apply to full-time,
full-year workers.
Wages, benefits, and total compensation in this report were converted to 2015 dollars
using the employment cost index.

www.cbo.gov/publication/52637

Contents

Summary

1

Wages 1
Benefits 2
Total Compensation

3

Comparison With CBO’s Analysis of the 2005–2010 Period

3

Scope of the Analysis

4

Comparing the Compensation of Federal and Private-Sector Employees

5

The Federal Workforce

5

Differences Between the Federal and Private-Sector Workforces

6

CBO’s Approach to Analyzing Compensation for Federal and Private-Sector Employees

9

Comparison of Wages in the Federal Government and the Private Sector

10

Comparison of Benefits in the Federal Government and the Private Sector

13

Comparison of Total Compensation in the Federal Government and the Private Sector

15

Comparison With CBO’s Analysis of the 2005–2010 Period

15

BOX: CHANGES IN COMPENSATION FOR NEWLY HIRED FEDERAL EMPLOYEES

20

Appendix A: CBO’s Analytic Approach

21

Summarizing CBO’s Approach

21

Differences Between the Approach in This Report and That Used in the 2012 Report

22

Appendix B: Wages and Benefits for Federal Employees

23

Wages 23
Benefits 23
List of Tables and Figures

25

About This Document

26

Summary

T

he federal government employs about
2.2 million civilian workers—1.5 percent
of the U.S. workforce—spread among more
than 100 agencies in jobs that represent over
650 occupations. As a result, the government employs
workers with a broad complement of talents, skills, and
experience, and it competes with other government
and private-sector employers for people who possess the
mix of attributes needed to do the work of its agencies.
In fiscal year 2016, the government spent roughly
$215 billion to compensate federal civilian employees.
About two-thirds of that total was spent on civilian
personnel working in the Department of Defense, the
Department of Veterans Affairs, or the Department of
Homeland Security. Federal employees typically receive
periodic increases in their wages on the basis of performance, longevity, and changes in private-sector pay.
However, lawmakers eliminated annual across-the-board
increases for most federal civilian workers in calendar
years 2011, 2012, and 2013.
How does the compensation of federal civilian employees
compare with that of employees in the private sector?
The answer to that question is complicated by the fact
that the federal and private-sector workforces differ in
characteristics that can affect compensation, such as
experience, education, and occupation. On the whole,
federal workers tend to be older, more educated, and
more concentrated in professional occupations than
private-sector workers. To account for such differences,
the Congressional Budget Office has used data for 2011
through 2015 reported by a sample of households and
employers to estimate differences between the cost of
wages and benefits for federal employees and the cost
of wages and benefits for similar private-sector employees,
defined as those having a set of similar observable characteristics. Specifically, in its analysis, CBO sought to
account for differences in individuals’ level of education,
years of work experience, occupation, size of employer,
geographic location (region of the country and urban or
rural location), veteran status, and various demographic

characteristics (age, sex, race, ethnicity, marital status,
immigration status, and citizenship). This report updates
a 2012 CBO report that compared the compensation of
federal and private-sector employees for the 2005–2010
period.1
Even among workers with similar observable characteristics, however, employees of the federal government
and in the private sector may differ in other traits, such
as motivation or effort, that are not easy to measure but
that can matter a great deal for individuals’ compensation. Moreover, substantial ranges of compensation exist
in both the federal government and the private sector
among workers who have similar observable attributes.
Therefore, even within groups of workers who have such
similarities, the average differences in compensation
between federal and private-sector employees do not
indicate whether particular federal employees would
receive more or less compensation performing a similar
job in the private sector.
CBO’s analysis focuses on wages, benefits, and total
compensation (the sum of wages and benefits). It is
intended to address the question of how the federal
government’s compensation costs would change if the
average cost of employing federal workers was the same
as that of employing private-sector workers with certain
similar observable characteristics.

Wages
During the 2011–2015 period, the difference between
the wages of federal civilian employees and those of
similar private-sector employees varied widely depending
on the employees’ educational attainment. The extent of
that variation is evident in the differences in wages for
workers with a bachelor’s degree (the most common level
of education in the federal workforce), the least educated
workers, and the most educated workers:
1. Congressional Budget Office, Comparing the Compensation of
Federal and Private-Sector Employees (January 2012), www.cbo.gov/
publication/42921.

2 Comparing the Compensation of Federal and Private-Sector Employees, 2011 to 2015

OO Federal civilian workers whose highest level of education was a bachelor’s degree earned 5 percent more,
on average, in the federal government than in the
private sector (see Summary Figure 1).

Summary Figure 1.

OO Federal civilian workers with no more than a high
school education earned 34 percent more, on average,
than similar workers in the private sector.

120

Average Compensation of Federal and PrivateSector Workers, by Educational Attainment
2015 Dollars per Hour

100

OO By contrast, federal workers with a professional
degree or doctorate earned 24 percent less, on average, than their private-sector counterparts.

80

Overall, the federal government would have reduced its
spending on wages by 3 percent if it had decreased the
pay of its less educated employees and increased the pay
of its more educated employees to match the wages of
their private-sector counterparts.

40

Those estimates do not show precisely what federal
workers would earn if they were employed in a comparable position in the private sector. The difference between
what federal employees earn and what they would earn
in the private sector could be larger or smaller depending
on characteristics that were not included in this analysis
(because such traits are not easy to measure). In addition, the estimated differences depend on how well the
observable characteristics were measured in the samples
of employees used by CBO and on other factors that are
inherent in any statistical analysis.
The span between the wages of high- and low-paid
employees was narrower in the federal government than
in the private sector, even after accounting for employees’ education and other observable traits. The narrower
dispersion of wages among federal employees may reflect
the constraints of federal pay systems, which make it
harder for managers to reward the best performers or to
limit the pay of poor performers.

Benefits
During the 2011–2015 period, the federal and private
sectors differed much more with regard to the costs that
employers incurred in providing current and future benefits—including health insurance, retirement benefits, and
paid leave—than they did with regard to wages. Again,
the extent of that difference varied according to workers’
educational attainment:

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Average Federal
Benefits

Average Private-Sector
a
Benefits

Average Federal
Wages

Average Private-Sector
Wagesa

60

20
0

High
School
Diploma
or Less

Some
College

Bachelor’s
Degree

Master’s Professional
Degree Degree or
Doctorate

Source: Congressional Budget Office, using data for 2011 through
2015 from the March Current Population Survey, the Office of Personnel
Management, and the National Compensation Survey.
The wages shown here include overtime pay, tips, commissions, and
bonuses. The benefits shown here are measured as the average cost,
per hour worked, that an employer incurs in providing noncash
compensation.
a. Average wages and benefits for private-sector workers who resemble
federal workers in occupation, years of work experience, and certain
other observable characteristics that are likely to affect compensation.

OO Average benefits were 52 percent higher for federal
employees whose highest level of education was
a bachelor’s degree than for similar private-sector
employees (see Summary Table 1).
OO Average benefits were 93 percent higher for federal
employees with no more than a high school education than for their private-sector counterparts.
OO Among employees with a doctorate or professional
degree, by contrast, average benefits were about the
same in the two sectors.
On average for workers at all levels of education, the
cost of benefits was 47 percent higher for federal civilian

Comparing the Compensation of Federal and Private-Sector Employees, 2011 to 2015 3

SUMMARY

Summary Table 1.

Differences in Average Hourly Compensation Between Federal and Private-Sector Workers,
by Educational Attainment
Difference in 2015 Dollars per Hour
Total
Compensationa
Wages
Benefits

Wages

Percentage Difference
Total
Compensation
Benefits

High School Diploma or Less

$8

$10

$18

34%

93%

53%

Bachelor’s Degree

$2

$9

$12

5%

52%

21%

-$16

-$1

-$18

-24%

-3%

-18%

Professional Degree or Doctorate

Source: Congressional Budget Office, using data for 2011 through 2015 from the March Current Population Survey, the Office of Personnel
Management, and the National Compensation Survey.
CBO compared average hourly compensation (wages, benefits, and total compensation converted to 2015 dollars) for federal civilian workers and for
private-sector workers with certain similar observable characteristics that affect compensation—including occupation, years of experience, and size of
employer—by the highest level of education that workers attained.
Positive numbers indicate that, on average, wages, benefits, or total compensation was higher in the 2011–2015 period for federal employees than
for similar private-sector employees. Negative numbers indicate the opposite.
a. The numbers shown for total compensation may not equal the sum of the numbers for wages and benefits because of rounding to the nearest
dollar and because of the composition of the samples used by CBO.

employees than for private-sector employees with certain
similar observable characteristics, CBO estimates.
The most important factor contributing to differences
between the two sectors in the costs of benefits is the
defined benefit pension plan that is available to most
federal employees.2 Such plans have become less common in the private sector. CBO’s estimates of the costs
of benefits are much more uncertain than its estimates
of wages, primarily because the cost of defined benefit
pensions that will be paid in the future is more difficult
to quantify and because less-detailed data are available
about benefits than about wages.

Total Compensation
As with its components (wages and benefits), total compensation differed by varying degrees between the federal
government and the private sector over the 2011–2015
period depending on workers’ educational attainment:
OO Among workers whose education culminated in a
bachelor’s degree, the cost of total compensation
averaged 21 percent more for federal workers than for
similar workers in the private sector.
2. Defined benefit plans provide retirement income that is based
on fixed formulas, and the amount of that income is usually
determined by an employee’s salary history and years of service.

OO Among workers with a high school diploma or
less education, total compensation costs averaged
53 percent more for federal employees than for their
private-sector counterparts.
OO Total compensation costs among workers with a
professional degree or doctorate, by contrast, were
18 percent lower for federal employees than for similar
private-sector employees, on average.
Overall, the federal government paid 17 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.

Comparison With CBO’s Analysis of the
2005–2010 Period
Some of the differences between federal and private-​
sector compensation have changed since CBO’s previous
analysis of the issue, which covered the years from 2005
to 2010. For instance, the average total compensation
of federal workers without a bachelor’s degree exceeded
that of their counterparts in the private sector by more
between 2011 and 2015 than between 2005 and 2010.
Conversely, relative to their private-sector counterparts,
federal workers with a master’s degree received less average total compensation during the 2011–2015 period

4 Comparing the Compensation of Federal and Private-Sector Employees, 2011 to 2015

than during the 2005–2010 period. The differences in
total compensation by educational attainment changed
because wages grew more quickly among less educated
workers in the federal government than they did among
workers in the private sector and because CBO adjusted
its approach to determining who is a federal employee.
(Except for that adjustment, both analyses used broadly
similar approaches.)
Two significant policy changes have affected federal wages
since 2010. First, lawmakers eliminated across-the-board
salary increases for federal employees from 2011 to 2013,
limiting the total increase from 2010 through 2015 to 2
percent. In contrast, salaries increased by about 10 percent in the private sector over the 2010–2015 period.
However, in addition to the across-the-board increase of
2 percent, average federal hourly wages were boosted by a
decrease in federal hiring—because recently hired federal
employees typically have lower salaries than other federal
employees—and by a temporary reduction in the number
of hours worked by salaried federal employees.
Second, lawmakers increased the share of wages that
workers first hired after 2012 must contribute to the
federal defined benefit retirement plan. That change will
gradually reduce the cost to the federal government of
defined benefit pensions beginning in 2017, but it does
not factor into this analysis because workers hired after
2012 have not yet accumulated the five years of service
needed to receive those benefits.

Scope of the Analysis
CBO’s results apply to the cost of employing full-time,
full-year workers. The analysis focuses on those workers—who accounted for about 94 percent of the total
hours worked by federal employees from 2011 through
2015—because more-accurate data are available for
them than for other workers. CBO measured the cost of
employing those workers as the present value of providing compensation, some of which may be paid out
in the future. (A present value is a single number that

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expresses a flow of current and future payments in terms
of an equivalent lump sum paid today.) Thus, the cost
of employing federal or private-sector workers includes
an estimate of the cost of retirement benefits to be paid
in the future to current employees. That present-value
approach differs from the budgetary treatment of
retirement benefits for federal workers; the cost of those
benefits is recorded as federal outlays when people
receive them rather than when the commitment to pay
them is incurred.
CBO’s analysis is limited to selected benefits (such as
health insurance and paid leave) provided to federal
and private-sector workers. The analysis excludes certain benefits some workers receive—for example, the
above-market rate of return the federal government offers
its employees through the G Fund (one of the investment options in their retirement plan) and the stock
options that some private-sector firms provide to their
employees. In CBO’s judgment, the benefits that are not
included in this analysis are less costly, on average, than
the benefits that are included.
A key consideration in setting compensation is the ability
to recruit and retain a highly qualified workforce. But
assessing how changes in compensation would affect
the federal government’s ability to recruit and retain the
personnel it needs is beyond the scope of this analysis.
Factors other than the amount of compensation can affect
that ability. For example, greater job security tends to
decrease the compensation that the federal government
needs to offer, relative to compensation in the private
sector, to attract and retain highly qualified employees.
Conversely, the government’s cost of total compensation
for a federal employee includes a greater share of costs for
retirement benefits, which workers may find less valuable
than an equivalent amount of cash received today. If so,
and if all other things are equal, that mix of compensation
would tend to increase the total amount of compensation
needed to pay federal workers relative to similar workers
in the private sector.

Comparing the Compensation of Federal and
Private-Sector Employees
The Federal Workforce
The federal government employs about 2.2 million
workers (not counting military personnel or employees
of the U.S. Postal Service) in a wide variety of departments, agencies, and occupations. Those workers receive
compensation in the form of wages and benefits, such as
health insurance and pensions, at a total cost to the government of about $215 billion in fiscal year 2016. About
65 percent of that amount is spent on the three departments that employ the most workers: the Departments
of Defense, Veterans Affairs, and Homeland Security.

Size of the Federal Workforce
For the past 30 years, the number of civilians employed
by the federal government has hovered around 2 million people (see Figure 1).1 During that period, federal
employees have accounted for a declining share of the
total U.S. workforce, because employment by the private
sector and by state and local governments has grown
along with the economy. In 1985, when about 85 million people worked in the private sector and 13 million
worked for state or local governments, federal employees made up 2.1 percent of the workforce. By 2015,
private-sector employment had reached 123 million
and employment by state and local governments had
reached 19 million. As a result, federal civilian employees
accounted for 1.5 percent of the workforce in that year.
Besides federal civilian workers, who are the focus of this
analysis, the government directly or indirectly employs
other people to provide various services. In particular,
the armed services include about 2.2 million uniformed
personnel, about 1 million of whom are reservists. (The
1. In this report, the size of a workforce is measured by the number
of full-time and part-time employees. An alternative measure
of size converts the work schedules of part-time employees to a
full-time basis. Because part-time work is less common in the
federal government, federal workers are a larger portion of the
workforce under that alternative measure—2.3 percent in 1985
and 1.6 percent in 2015.

Congressional Budget Office has analyzed the compensation of military personnel in several publications.)2
In addition, about 700,000 people work for government enterprises that typically pay for their employees’
compensation through the sale of services rather than
through tax revenues. (By far the largest government
enterprise in terms of employment is the Postal Service.)
Finally, because the federal government uses the private
sector to carry out some of its functions, a number of
private-sector employees work under contract to the
federal government but have their compensation set by
their employer.3 This analysis does not include military
personnel or employees of self-financing government
enterprises such as the Postal Service; federal contractors
are included as private-sector workers.
2. For a comparison of military and private-sector compensation,
see the testimony of Carla Tighe Murray, Senior Analyst for
Military Compensation and Health Care, Congressional Budget
Office, before the Subcommittee on Personnel of the Senate
Committee on Armed Services, Evaluating Military Compensation
(April 28, 2010), www.cbo.gov/publication/21430; and
Congressional Budget Office, Evaluating Military Compensation
(June 2007), www.cbo.gov/publication/18788. CBO compared
military compensation with federal civilian compensation in
“Analysis of Federal Civilian and Military Compensation,” an
attachment to a letter to the Honorable Steny H. Hoyer (January
20, 2011), www.cbo.gov/publication/22002.
3. The number of federal contractors is estimated in John J. Dilulio,
10 Questions and Answers About America’s “Big Government”
(Brookings Institution, February 2017), http://tinyurl.com/
gouqmpw. Spending on federal contractors is tabulated in
Congressional Budget Office, Federal Contracts and the Contracted
Workforce (March 2015), www.cbo.gov/publication/49931. The
compensation of federal contractors is discussed in Project on
Government Oversight, Bad Business: Billions of Taxpayer Dollars
Wasted on Hiring Contractors (POGO, 2011), www.pogo.org/
our-work/reports/2011/co-gp-20110913.html. In addition to
federal contractors, the government supports the jobs of other
private-sector employees through its purchases of goods and
services produced by private firms. For example, the government
buys computers and office supplies from companies in the private
sector.

6

Comparing the Compensation of Federal and Private-Sector Employees, 2011 to 2015

OO The Department of Veterans Affairs employs
17 percent of the federal civilian workforce. About
60 percent of its employees work in various medical
professions, the most common of which is nursing.

Figure 1.

Trends in Government and Private-Sector
Employment Since 1985
Millions of People
160

OO The Department of Homeland Security employs
9 percent of the federal civilian workforce. The most
common job in that department is inspector for
the Transportation Security Administration, which
accounts for just under a quarter of the department’s
employees.

Total U.S. Employment, by Sector

140
120
100
80

Private Sector

60

Federal
Government

40
20
0
1985

7

State and Local Governments

1990

1995

2000

2005

2010

2015

Federal Employment, by Type

Government Enterprisesa

4
Military

3
2
1
0
1985

Civilian

1990

1995

2000

2005

An additional 37 percent of federal employees work
for the other departments and agencies of the executive
branch. The most common occupations among those
workers are program administrator, information technology worker, and program analyst. The remaining
3 percent of the federal workforce is employed by the
legislative and judicial branches of government.

Differences Between the Federal and
Private-Sector Workforces

6
5

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2010

2015

Source: Congressional Budget Office, using data from the national income
and product accounts.
This figure includes employees who work part time or part of the year.
a. Government enterprises are federal entities that typically fund their
operating costs, including employees’ compensation, through the sale
of services rather than through tax revenues. By far the largest government enterprise in terms of employment is the U.S. Postal Service.

Agencies and Occupations
Federal civilian employees perform a broad range of tasks
in more than 650 occupations. Although federal workers are employed by more than 100 departments and
agencies, 60 percent of them work at three departments
in the executive branch (see Figure 2):
OO The Department of Defense employs 34 percent of
the federal civilian workforce. Those employees work
in hundreds of different occupations; the most common are program administrator, information technology worker, and program analyst.

Various characteristics of employees—including their
occupation, education, and age—are likely to influence
their compensation, regardless of whether they work for
the federal government or the private sector. The federal
and private-sector workforces differ in several significant
ways that CBO incorporated into its comparison of
compensation between the two sectors.
For example, 36 percent of federal employees work in
professional occupations, such as the sciences or engineering, compared with only 20 percent of private-​sector
employees; in contrast, 24 percent of private-sector
employees work in occupations such as sales, production, or construction, compared with only 5 percent of
federal employees (see Table 1). Professional occupations
generally require more formal training or experience
than do the occupations more common in the private
sector. Partly because of that difference, the average age
of federal employees is substantially higher than that of
private-sector employees (46 versus 42). The greater concentration of federal workers in professional occupations
also means that they are more likely to have a bachelor’s
degree: Sixty percent of the federal workforce has at least
that much education, compared with 35 percent of the
private-sector workforce (see Figure 3). Likewise, 28 percent of federal employees have a master’s, professional
(such as a law or medical degree), or doctoral degree,
compared with 11 percent of private-sector employees.

Comparing the Compensation of Federal and Private-Sector Employees, 2011 to 2015 7

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Figure 2.

Federal Civilian Employment, by Branch and Department, 2015
Legislative and Judicial (3%)

Other Executive Agencies (13%)

Defense (34%)

SSA (3%)
Interior (3%)
HHS (4%)

100

Agriculture (4%)

Treasury (5%)

Justice (5%)
Veterans Affairs (17%)
Homeland Security (9%)

Source: Congressional Budget Office, using data from the Office of Personnel Management.
This figure includes federal employees who work part time or part of the year. It excludes military personnel (who account for roughly the same number
as federal civilian employees) and employees of government enterprises, such as the U.S. Postal Service. It also excludes the Central Intelligence Agency,
the National Security Agency, the Defense Intelligence Agency, and the National Imagery and Mapping Agency.
HHS = Department of Health and Human Services; SSA = Social Security Administration.

The characteristics of employers, as well as those of
workers, differ between the federal government and the
private sector. Many federal agencies are quite large;
the biggest, the Department of Defense, employs about
750,000 civilian workers. Nearly all federal employees work for entities that have at least 1,000 workers,
whereas only about 42 percent of private-sector employees work for entities of that size.

The services that the federal government provides are
needed across the nation, so federal employees work in a
wide variety of locations. For instance, nurses and doctors who work at veterans’ hospitals, security screeners at
airports, and air traffic controllers are spread throughout
the United States. In all, about 16 percent of federal
employees work in or around Washington, D.C. (compared with 2 percent of the private-sector workforce); the

8 Comparing the Compensation of Federal and Private-Sector Employees, 2011 to 2015

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Table 1.

Characteristics of the Federal and Private-Sector Workforces
Percentage of Workforce
Federal Government
Highest Educational Attainment
High school diploma or less
Some college
Bachelor’s degree
Master’s degree
Professional degree or doctorate
Total
Occupation
Professional
Management, business, financial
Administrative or office support
Service
Transportation
Installation, maintenance, repair
Production
Construction, extraction
Sales
Farming, fishing, forestry
Total
Size of Employer, by Number of Workers
Fewer than 10
10 to 99
100 to 499
500 to 999
1,000 or more
Total
Region
South
West
Washington, D.C., metropolitan area
Midwest
Northeast
Total
Memorandum:
Veterans (Percentage of workforce)
Average Age (Years)
Number of People in Sample

13
27
31
20
9
____

36
29
24
8
3
____

100

100

36
27
12
12
3
3
2
2
1
1
____

20
19
13
12
7
4
8
5
11
1
____

100

100

*
*
*
*
99
____

11
25
15
6
42
____

100

100

37
21
16
14
11
____

35
23
2
22
18
____

100

100

22
46
6,892

5
42
163,148

Source: Congressional Budget Office, using data for 2011 through 2015 from the March Current Population Survey.
* = between zero and 0.5 percent.

Private Sector

Comparing the Compensation of Federal and Private-Sector Employees, 2011 to 2015 9

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Figure 3.

Differences in Education and Occupation Between
the Federal and Private-Sector Workforces
Percentage of Workforce
80

Federal Government
Private Sector

60

40

20

0
Percentage of the
Workforce With at Least a
Bachelor's Degree

Percentage of the
Workforce in
a Professional or
Business Occupationa

Source: Congressional Budget Office, using data for 2011 through 2015
from the March Current Population Survey.
a. Corresponds to the occupational categories “Professional” and
“Management, business, and financial” listed in Table 1. About 65 percent of the workers in those occupations have at least a bachelor’s
degree, compared with 17 percent of the workers in other occupations.

other 84 percent of federal workers—about 1.8 million
people—are located throughout the country in roughly
similar proportions to workers in the private sector.
The attributes of the federal workforce are more like
those of private-sector workers at large firms than those
of workers at small firms, because both large firms and
federal agencies tend to require a workforce that is more
specialized and educated than small firms do. (In this
analysis, small firms are those with fewer than 1,000
employees, and large firms are those with 1,000 or more
employees.) Many federal employees have expertise
in specific tasks, as over 95 percent of them work in
agencies that divide tasks among more than 100 occupations. That degree of specialization is not possible for
small employers. In addition, only 31 percent of workers
at small firms have at least a bachelor’s degree, whereas
the proportion of workers with that level of education is
greater at large firms (41 percent).

CBO’s Approach to Analyzing Compensation
for Federal and Private-Sector Employees
How would the federal government’s compensation costs
differ if the average cost of employing federal workers
was the same as that of employing workers with certain
similar observable characteristics in the private sector? To
address that question, CBO examined average compensation costs for employees in the federal government and
the private sector, accounting for differences in those
characteristics. The comparison between the two sectors
is based on the cost that an employer incurs in providing compensation, including wages and salaries, a share
of health insurance premiums, retirement benefits, and
payroll taxes (which fund government programs such as
Social Security and Medicare).
CBO measured the cost of benefits provided to retirees as the present value of future obligations—that is,
as a single number that expresses a flow of current and
future payments in terms of an equivalent lump sum
paid today. Such benefits are not necessarily paid by the
employer in the year that someone works. In particular,
retirement benefits for federal workers are recorded as
federal spending when someone receives those benefits
during retirement.
In both the federal government and the private sector,
compensation may depend on a number of factors that
can be observed and measured. CBO sought to account
for differences in those factors—education, occupation, years of work experience, geographic location
(region of the country and urban or rural location), size
of employer, veteran status, and certain demographic
characteristics (age, sex, race, ethnicity, marital status,
immigration status, and citizenship). That approach
produces a comparison between the average compensation of federal workers and the average compensation of
private-sector workers who have certain similar observable attributes. (For more details about that approach,
see Appendix A.) Because education plays a particularly
large role in determining compensation, CBO reports
its results for five levels of educational attainment: high
school diploma or less, some college, bachelor’s degree,
master’s degree, and doctorate or professional degree.
People’s compensation is also affected by many characteristics that are not easy to observe or measure, such as
their natural ability, personal motivation, and effort. The
degree to which federal and private-sector employees
may differ with regard to those characteristics is much

10 Comparing the Compensation of Federal and Private-Sector Employees, 2011 to 2015

harder to quantify, and no adjustments were made for
those attributes in this analysis.

Comparison of Wages in the Federal
Government and the Private Sector
Using data from the Current Population Survey (CPS)
and the analytic approach described above, CBO compared average hourly wages for federal civilian workers,
by the highest level of education they achieved, with
average hourly wages for private-sector workers who have
certain similar observable traits that affect wages. CBO
also compared the range between low and high wages for
federal workers with the wage range for similar workers
in the private sector.

Average Wages
By CBO’s estimate, the extent to which hourly wages
differed for federal employees and private-sector
employees with certain similar observable traits during
the 2011–2015 period varied greatly according to workers’ educational attainment. The extent of that variation
is evident in comparisons of the differences in wages for
the least educated workers, workers with a bachelor’s
degree (the most common level of education in the federal workforce), and the most educated workers:
OO Federal employees with no more than a high school
diploma earned 34 percent more per hour, on average, than private-sector employees with the same level
of education (see Table 2).
OO Federal employees whose highest level of education
was a bachelor’s degree—about one-third of the federal workforce—earned roughly 5 percent more per
hour, on average, than similar workers in the private
sector.
OO Federal workers with a doctorate or professional
degree earned 24 percent less per hour, on average,
than similar workers in the private sector.
On average, for employees at all education levels, wages
were 3 percent higher for workers in the federal government than for private-sector workers with certain similar
observable characteristics, CBO estimates. Thus, the
federal government would have reduced its spending on
wages by 3 percent if it had decreased the pay of its less
educated employees and increased the pay of its more
educated employees to match the wages of their private-​
sector counterparts.

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If CBO had not structured this analysis to compare
workers with similar observable traits, the difference
in average wages between the two sectors would have
been much larger. Comparing federal and private-sector
employees with similar educational attainment was the
most important element, for two reasons: Highly educated workers tend to earn much higher wages than less
educated workers, and federal employees have more education, on average, than employees in the private sector.
Accounting for differences in some of the other characteristics was also important because federal employees
tend to work in higher-paying occupations and to have
more years of work experience, which also tend to be
associated with higher wages. Finally, employees of large
firms tend to earn more per hour than employees of
small firms, and federal employees are more than twice
as likely as private-sector employees to work for entities
that employ at least 1,000 people. Besides accounting for
differences in those characteristics, CBO compared federal workers with private-sector workers who had similar
demographic traits, but that adjustment did not have
much effect on the difference between average federal
and private-sector wages.
The large size of federal agencies does not necessarily
imply that federal workers would receive the higher wages
typical at large firms if they moved to the private sector.
On the one hand, jobs are likely to be more specialized
in the federal government and at large private firms than
they are at smaller firms, so large private-​sector employers might value the specialized skills of federal workers.
That possibility suggests that accounting for the size of
the employer leads to a more meaningful comparison
of wages. On the other hand, the higher wages paid by
large private firms may not reflect pay for skills that are
transferable between the federal and private sectors, so
adjusting for the employer’s size could understate the
difference between average federal and private-sector
wages for workers with similar traits. If adjustments for
the employer’s size are not made, the difference between
average federal and private-sector wages for all workers
rises from 3 percent to 10 percent, and similar changes
occur in the differences for workers at each level of
education.
Differences between the average wages of federal and
private-sector employees with the same measured traits
could reflect the effects of personal characteristics that
cannot be measured, differences in the way that the
federal government and the private sector determine pay,

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Comparing the Compensation of Federal and Private-Sector Employees, 2011 to 2015 11

Table 2.

Federal and Private-Sector Wages, by Workers’ Educational Attainment
Average Wages
(2015 dollars per hour)
Federal Government
Private Sectora

Percentage Difference
Between Averages

High School Diploma or Less

29.60

22.10

34

Some College

32.10

26.30

22

Bachelor’s Degree

39.50

37.60

5

Master’s Degree

45.00

48.20

-7

Professional Degree or Doctorate

51.90

68.00

-24

38.30

37.20

3

All Levels of Education

Source: Congressional Budget Office, using data for 2011 through 2015 from the March Current Population Survey.
Wages are measured as an average hourly wage rate and include overtime pay, tips, commissions, and bonuses.
a. Average wages for private-sector workers who resemble federal workers in occupation, years of work experience, and certain other observable
characteristics that are likely to affect wages.

or a combination of those factors. The data do not allow
CBO to gauge the degree to which each of those factors
affects differences in average wages between the sectors.
The findings of CBO’s analysis vary from the results of
other studies of public- and private-sector wages. That
variation is largely attributable to differences in analytic
methods. The distinction between those methods and the
relationship of CBO’s analysis to previous research are
discussed at length in a CBO working paper from 2012.4
To address the question of how the government’s costs
for wages and salaries would change if federal workers
cost the same amount to employ as similar private-sector
workers, CBO focused on differences in average wages,
which are closely tied to total government spending for
the pay of federal employees. Other studies that found
4. Justin Falk, Comparing Wages in the Federal Government and
the Private Sector, Working Paper 2012-3 (Congressional
Budget Office, January 2012), Section II, www.cbo.gov/
publication/42922. That paper addresses CBO’s analysis of
federal wages from 2005 through 2010, but the points remain
relevant for the 2011–2015 period analyzed in this report. The
relationship between CBO’s analysis and previous research is
also discussed in Government Accountability Office, Federal
Workers: Results of Studies on Federal Pay Varied Due to Differing
Methodologies, GAO-12-564 (June 2012), www.gao.gov/
products/GAO-12-564; and David H. Bradley, Comparing
Compensation for Federal and Private-Sector Workers: An Overview,
Report for Congress R42636 (Congressional Research Service,
July 30, 2012).

larger differences between federal and private-sector
pay used a different measure of wages.5 However, their
measure overstates the differences between the cost of
employing federal workers and similar private-sector
workers because of the way the measure accounts for the
difference in the dispersion of wages (the range from low
to high) between those groups.
Besides the use of averages, another key feature of CBO’s
approach was comparing workers with similar characteristics, such as education, experience, and occupation.
Other research that has compared the average pay of
federal and private-sector workers who have similar jobs
has found that the average salary for federal employees is
much lower than the average for private-sector workers in
comparable jobs.6 However, by focusing the comparisons
on specific, detailed jobs, that research may have ended

5. See Rachel Greszler and James Sherk, Why It Is Time to Reform
Compensation for Federal Employees, Backgrounder 3139 on
Labor (Heritage Foundation Center for Data Analysis, July
2016), http://tinyurl.com/zf25ymg; and Andrew Biggs and Jason
Richwine, Comparing Federal and Private Sector Compensation,
Economic Policy Working Paper 2011-02 (American Enterprise
Institute, June 2011), www.aei.org/publication/comparingfederal-and-private-sector-compensation.
6. Federal Salary Council, Level of Comparability Payments for
January 2018 (December 2016), https://go.usa.gov/xXCGm.

12 Comparing the Compensation of Federal and Private-Sector Employees, 2011 to 2015

up comparing federal workers with private-sector workers
who have more experience.7

The Distribution of Wages
In addition to looking at average wages, CBO examined
the distribution of wages for federal workers and for
private-sector workers with certain similar observable
characteristics in each category of educational attainment. It then compared wages in the two sectors at the
10th, 25th, 50th (the median), 75th, and 90th percentiles of those distributions.8 Among employees with no
more than a bachelor’s degree, low-wage workers (those
at the 10th and 25th percentiles) earned more in the federal government than in the private sector. By contrast,
among employees with at least a bachelor’s degree, highwage workers (those at the 90th percentile) earned less in
the federal government than in the private sector. (That
is also the case for workers at the 75th percentile of those
who have a professional degree or doctorate. Among
employees whose education culminated in a bachelor’s
degree, workers at the 75th percentile earned more in the
federal government than in the private sector.)
Both high and low wages tend to be less prevalent in
the federal government than in the private sector, so the
range between those wages—the dispersion of wages—
tends to be narrower for federal employees. For example,
as measured by the range from the 10th percentile to the
90th percentile, the dispersion of wages was smaller for
federal employees with at least a bachelor’s degree than
for similar private-sector employees. That difference was
especially evident for people with a professional degree or
doctorate, mostly because the 90th percentile of wages is
much lower for federal employees than for private-sector
workers with the same level of education (see Figure 4).
In fact, the large differences between the high percentiles
of those two wage distributions push the average wage
of federal employees substantially below the average
wage for their private-sector counterparts. In contrast,
the 50th percentiles of those distributions are about
7. See Melissa Famulari, “What’s in a Name? Title Inflation in
the Federal Government” (draft, University of Texas at Austin,
August 2002), www.econweb.ucsd.edu/~mfamular/pdfs/
FederalPrivatepay.pdf (182 KB).
8. For details about how CBO constructed the wage distributions,
see Justin Falk, Comparing Wages in the Federal Government
and the Private Sector, Working Paper 2012-3 (Congressional
Budget Office, January 2012), Section V, www.cbo.gov/
publication/42922.

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Figure 4.

Dispersion of Federal and Private-Sector Wages,
by Workers’ Educational Attainment
Wages, 2015 Dollars per Hour

180
160

Federal Government
Private Sectora

140
120
100
80
60
40
20
0

High School Diploma Bachelor’s Degree
or Less

Professional Degree
or Doctorate

Source: Congressional Budget Office, using data for 2011 through 2015
from the March Current Population Survey.
The horizontal line in the middle of each shaded box indicates the
median (50th percentile) wage; the top and bottom of the box mark the
75th and 25th percentiles, respectively; and the whiskers above and
below the box mark the 90th and 10th percentiles.
a. Wages for private-sector workers who resemble federal workers in
occupation, years of work experience, and certain other observable
characteristics that are likely to affect wages.

the same. The prevalence of higher wages also pushes
the average wage above the 50th percentile for workers
with other levels of education, particularly in the private
sector. One implication is that about 50 percent of the
federal workers whose education culminated in a bachelor’s degree earned less than the average wage of their
private-sector counterparts, even though the average
wage was higher among the federal workers.
The dispersion of wages also tends to differ between
federal employees and their private-sector counterparts
when the workers are grouped by occupation instead of
educational attainment. For example, the range from the
10th percentile to the 90th percentile was significantly

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Comparing the Compensation of Federal and Private-Sector Employees, 2011 to 2015 13

narrower for federal managers than for similar privatesector managers. In that regard, those distributions
differed by about the same amount as the distributions
for workers with at least a bachelor’s degree.
The narrower dispersion of wages among federal workers
may reflect the constraints of federal pay systems, which
limit the pay of managers and make it harder for managers to reward the highest performers or to limit the compensation of the lowest performers. The highest salaries
under federal pay schedules are substantially lower than
the average salaries for most executive positions in the
private sector.9 Federal pay systems also limit the number
of workers with low wages, because most federal workers
compensated under pay schedules move to progressively
higher pay levels as they become eligible for those levels
on the basis of their years of federal employment. (For
more details about those pay schedules, see Appendix B.)
However, federal pay systems also include tools, such
as promotions and bonuses, that managers can use to
reward some top performers.

Comparison of Benefits in the Federal
Government and the Private Sector
The federal government and most large private employers
provide various forms of noncash compensation, such
as retirement benefits, health insurance, and paid leave.
The cost of providing those benefits varies greatly among
private-sector employers as well as between the federal
government and the private sector. Smaller private
employers generally offer less-generous health insurance
and other benefits; some do not offer such benefits at
all. However, almost all employers are required to pay
various payroll taxes to fund all or part of the benefits
that workers or retirees receive through the Social Security,
Medicare, unemployment insurance, and workers’ compensation programs.
In both the federal government and the private sector,
the cost of some benefits, such as retirement benefits and
paid leave, is based largely on the wages that employees
receive. Thus, the factors that determine an employee’s
9. Congressional Budget Office, Comparing the Pay and Benefits
of Federal and Nonfederal Executives (November 1999), www.
cbo.gov/publication/12015. That report compares pay in 1998.
Since then, the highest salaries in the federal pay schedules have
risen to $207,800 for the Executive Schedule and $187,000 for
the Senior Executive Service. Those amounts remain below the
average salaries for most executive positions at large private-sector
firms even in 1998.

wages—such as education, occupation, and experience—
will also influence the cost that an employer incurs to
provide those benefits. For example, workers with more
education tend to receive more expensive benefits as well
as higher wages. The cost of other benefits, by contrast, is
not directly affected by the wages that employees receive.
In particular, the cost of providing health insurance for
federal workers depends directly on the insurance plan
chosen and on whether an employee has single, singleplus-one, or family coverage (although that cost may
be indirectly affected by the employee’s wages if higher-​
income workers tend to choose more expensive insurance
plans).
CBO compared the cost of the benefits provided to
federal and to private-sector employees, accounting for
the same differences in workers’ characteristics that were
used to analyze wages. For consistency with the measure
of hourly wages, the cost of benefits was measured on an
hourly basis by dividing estimates of the annual cost that
an employer incurred to provide those benefits by the
number of hours that an employee worked during the
year.
As with wages, differences in the cost of benefits in the
federal government and the private sector varied by
employees’ highest level of education (see Table 3). For
example, CBO estimates that, relative to costs for similar
workers in the private sector, benefit costs were about:
OO 93 percent higher, on average, for federal workers
with a high school diploma or less education;
OO 52 percent higher, on average, for federal workers
whose highest level of education was a bachelor’s
degree; and
OO Roughly the same, on average, for federal workers
with a professional degree or doctorate.10
On average for workers at all education levels, benefits
for federal employees cost about $26 per hour worked,
whereas benefits for private-sector employees with
certain similar observable characteristics cost $18, CBO
10. CBO estimates that benefits for federal workers with a
professional degree or doctorate are 3 percent lower, on average,
than benefits for private-sector workers with similar observable
characteristics. However, that estimate is subject to considerable
uncertainty because of the small number of workers in the data
who have that level of education.

14 Comparing the Compensation of Federal and Private-Sector Employees, 2011 to 2015

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Table 3.

Federal and Private-Sector Benefits, by Workers’ Educational Attainment
Average Benefits
(2015 dollars per hour)
Federal Government
Private Sectora

Percentage Difference
Between Averages

High School Diploma or Less

21.30

11.10

93

Some College

24.20

13.50

80

Bachelor’s Degree

27.50

18.10

52

Master’s Degree

29.80

22.90

30

Professional Degree or Doctorate

29.70

30.70

-3

26.50

18.00

47

All Levels of Education

Source: Congressional Budget Office, using data for 2011 through 2015 from the March Current Population Survey, the Office of Personnel
Management, and the National Compensation Survey.
Benefits are measured as the average cost, per hour worked, that an employer incurs in providing noncash compensation. The average benefits
shown here are for workers at institutions that employ at least 1,000 people.
a. Average benefits for private-sector workers who resemble federal workers in occupation, years of work experience, and certain other observable
characteristics that are likely to affect benefits.

estimates. Thus, benefits for federal workers cost 47 percent more per hour worked, on average, than benefits for
private-sector workers with similar observable attributes.
Benefits also constituted a larger share of compensation
for federal workers, accounting for 41 percent of the cost
of total compensation, compared with 32 percent for
workers in the private sector.
Most of the higher benefit costs incurred by the federal
government stem from differences in retirement benefits. The federal government provides retirement benefits to its workers through both a defined benefit plan
and a defined contribution plan, whereas many large
private-sector employers have replaced defined benefit
plans with defined contribution plans.11 The federal
government also provides subsidized health insurance to
qualified retirees, an arrangement that has become much
less common in the private sector. As a result, deferred
11. Defined benefit plans provide retirement income that is based
on fixed formulas, and the amount of that income is usually
determined by an employee’s salary history and years of service.
In contrast, the amount of retirement income provided by a
defined contribution plan, such as a 401(k) account, depends on
the performance of the account’s investments as well as on the
amount of contributions made by the employer and employee.

compensation accounts for a greater portion of total
compensation in the federal government than in the
private sector, on average. That difference could affect
the types of workers who choose federal employment
over private-sector employment. Federal pension and
health care benefits for retirees are likely to attract workers who plan to stay with the same employer for many
years, because the value of those benefits rises sharply
if an employee waits to leave federal service until he or
she is eligible for an immediate pension (at which point
the employee is generally also eligible to receive federal
health care benefits in retirement).
Comparisons of benefits by other researchers have not
used data that allow federal employees to be compared
with private-sector employees who have similar job-​related
attributes.12 Those comparisons have found bigger differences between average federal and private-sector benefits
than CBO finds. However, CBO’s analysis indicates that a
large portion of those bigger differences is attributable to
the fact that federal workers have more years of education
and experience, on average, than private-sector workers do.

12. For details, see Justin Falk, Comparing Benefits and Total
Compensation in the Federal Government and the Private Sector,
Working Paper 2012-4 (Congressional Budget Office, January
2012), Section II, www.cbo.gov/publication/42923.

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Comparing the Compensation of Federal and Private-Sector Employees, 2011 to 2015 15

CBO’s estimates of differences in benefits between the
two sectors are more uncertain than its estimates of differences in wages. That greater uncertainty reflects the complexity of measuring benefits and the extrapolations that
were necessary to integrate data sets from various sources
(for more details about those sources, see Appendix A).

Comparison of Total Compensation in the
Federal Government and the Private Sector
CBO combined its analyses of wages and benefits to
assess differences between the federal government and
the private sector in total compensation for workers with
certain similar observable characteristics:
OO Among workers with a high school diploma or less
education, total compensation costs were 53 percent
higher, on average, for federal employees than for
similar private-sector employees (see Table 4).
OO Among workers whose education ended in a bachelor’s degree, the cost of total compensation averaged
21 percent more for federal workers than for similar
workers in the private sector.
OO Among workers with a professional degree or doctorate, by contrast, total compensation costs were 18
percent lower, on average, for federal employees than
for private-sector employees with similar attributes.
For workers with a bachelor’s degree or less, the cost of
total compensation averaged about $60 per hour worked
for federal employees, compared with about $46 per
hour worked for employees in the private sector with
certain similar observable characteristics. In contrast, the
cost of total compensation averaged about $77 per hour
worked for federal employees with a master’s degree, professional degree, or doctorate, which is about $3 less than
the average for their private-sector counterparts. Overall, total compensation was about 17 percent higher, on
average, for federal workers than for similar private-​sector
workers, indicating that the government spent about
17 percent more on total compensation than it would
have if it provided its employees compensation equal to
that of their private-sector counterparts.
In part because both federal and private-sector workers
may value wages differently than benefits, comparisons
of total compensation are an incomplete indicator of
the government’s ability to recruit and retain a qualified
workforce. In this analysis, benefits are measured in

terms of the cost that employers incur in providing them,
which might not match the value that employees place
on benefits. An implication is that differences in benefits
might not compensate for apparently countervailing
differences in wages, even if the measured differences in
benefits and wages are similar. On the one hand, workers tend to pay less income tax on compensation that
takes the form of benefits than they do on wages, which
enhances the value of benefits. On the other hand, some
recent research indicates that workers are willing to pay
only a small portion of the cost of funding an increase
in pension benefits, which suggests that they value wages
more highly than pension benefits.13 A broader assessment of how changes in the amount or composition of
total compensation would affect the government’s ability
to recruit and retain a qualified workforce is beyond the
scope of this analysis.

Comparison With CBO’s Analysis of the
2005–2010 Period
CBO’s 2012 report on differences between the wages,
benefits, and total compensation of federal and private-​
sector workers covered the years from 2005 through
2010. This report, which used analytic methods that are
broadly similar, covered the period from 2011 to 2015.
Compared with the previous analysis, in this analysis the
differences in compensation were substantially larger for
less educated workers, smaller for workers with master’s
degrees, and changed little for workers overall.

Changes in the Comparison of Wages
The differences in average wages by educational attainment primarily changed because wages grew more
quickly among less educated workers in the federal
government than among their counterparts in the private
sector and because CBO adjusted its approach to determining who is a federal employee. Differences in wages
were also affected by reductions in across-the-board
increases to federal salaries, a slowdown in federal hiring,

13. Maria D. Fitzpatrick, “How Much Are Public School Teachers
Willing to Pay for Their Retirement Benefits?” American
Economic Journal: Economic Policy, vol. 7, no. 4 (November
2015), pp. 165–188, http://dx.doi.org/10.1257/pol.20140087.
That study includes a discussion of why defined benefit pensions
are still common in the public sector even though the value that
workers place on them appears to be lower than their cost.

16 Comparing the Compensation of Federal and Private-Sector Employees, 2011 to 2015

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Table 4.

Federal and Private-Sector Total Compensation, by Workers’ Educational Attainment
Average Total Compensation
(2015 dollars per hour)
Federal Government
Private Sectora

Percentage Difference
Between Averages

High School Diploma or Less

50.90

33.40

53

Some College

56.30

40.40

39

Bachelor’s Degree

67.00

55.20

21

Master’s Degree

74.80

70.90

5

Professional Degree or Doctorate

81.70

99.80

-18

64.80

55.30

17

All Levels of Education

Source: Congressional Budget Office, using data for 2011 through 2015 from the March Current Population Survey, the Office of Personnel
Management, and the National Compensation Survey.
Total compensation consists of wages and benefits. The average compensation shown here is for workers at institutions that employ at least 1,000
people. Because a broader sample was used to compare wages than to compare benefits, the numbers shown here for total compensation may not
equal the sum of the numbers for wages and benefits separately.
a. Average total compensation for private-sector workers who resemble federal workers in occupation, years of work experience, and certain other
observable characteristics that are likely to affect compensation.

and a temporary reduction in the number of hours
worked by federal employees.
Changes in the Comparison of Wages by Level of
Education. At all five levels of educational attainment,
the differences between the wages paid by the federal
government and the private sector were larger during the
2011–2015 period than they were during the 2005–
2010 period. The average wages of federal workers with
a bachelor’s degree or less exceeded the average wages of
their private-sector counterparts by more between 2011
and 2015 than between 2005 and 2010 (see Table 5).
Conversely, the average wages of federal workers with
more than a bachelor’s degree fell further short of their
counterparts’ in the private sector between 2011 and
2015 than between 2005 and 2010. However, the
change for more educated workers is small and imprecisely measured.
One reason for the larger differences in wages in the
2011–2015 period is that wages grew more quickly
among less educated workers in the federal government
than among their counterparts in the private sector. In
particular, wages for federal workers who attended college
but did not earn a bachelor’s degree grew by about
11 percent between the 2005–2010 period and the
2011–2015 period. In contrast, wages for private-​sector

workers with similar amounts of education grew by
about 7 percent between the two periods. (Those growth
rates are not adjusted for general changes in the cost of
labor.) Those trends increased the difference between
the average wages of those workers from 15 percent to
19 percent. For the same reason, the difference between
the average wages of federal workers and their private-​
sector counterparts was boosted from 21 percent to
24 percent among workers with no more than a high
school diploma. (In order to isolate the effect of different
rates of wage growth, the estimates in this paragraph do
not reflect CBO’s adjustment to its approach to determining who is a federal employee.)
Another reason that CBO estimated larger differences
in wages for less educated workers is that the agency
adjusted its approach to determining who is a federal
employee. CBO primarily relies on data from the CPS
in its analysis of wages because the CPS includes information on federal employees and workers in the private
sector. However, data on federal employees compiled by
the Office of Personnel Management indicate that the
CPS substantially overstates the number of low-wage
workers in the federal government, so CBO adjusted the
data accordingly. Because most low-wage workers do not
have a bachelor’s degree and tend to have lower wages than
other federal employees with the same level of education,

Comparing the Compensation of Federal and Private-Sector Employees, 2011 to 2015 17

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Table 5.

Percentage Differences Between Federal and Private-Sector Compensation, by Analytic Period
2005 Through 2010

2011 Through 2015

Wages

Benefits

Total
Compensation

Wages

Benefits

Total
Compensation

High School Diploma or Less

21

72

36

34

93

53

Some College

15

71

32

22

80

39

Bachelor’s Degree

2

46

15

5

52

21

Master’s Degree

-5

36

8

-7

30

5

-23

2

-18

-24

-3

-18

2

48

16

3

47

17

Professional Degree or Doctorate
All Levels of Education

Source: Congressional Budget Office, using data for 2005 through 2015 from the March Current Population Survey, the Office of Personnel
Management, and the National Compensation Survey.
Differences are based on average compensation for private-sector workers who resemble federal workers in occupation, years of work experience,
and certain other observable characteristics that are likely to affect compensation.
Wages are measured as an average hourly wage rate and include overtime pay, tips, commissions, and bonuses.
Benefits and total compensation are measured as the average cost, per hour worked, that an employer incurs in providing noncash compensation.
The differences in averages shown here are for workers at institutions that employ at least 1,000 people.
The approach that CBO used to compare compensation from 2011 through 2015 is broadly similar to the approach the agency used to compare
compensation from 2005 through 2010 but differs in several respects. See the text for details.

the adjustment substantially increased the average wages
of federal workers with less than a bachelor’s degree. As
a result of that adjustment, the estimated differences
between the average wages of federal and private-sector
workers grew from 24 percent to 34 percent among
workers with no more than a high school diploma and
from 19 percent to 22 percent among workers with
some college education. (For additional details on the
methodological changes CBO made in this report, see
Appendix A.)
Changes in the Comparison of Average Wages. On
average for workers at all levels of education, the difference
in wages between the federal and private sectors changed
little between the two periods because reductions in
across-the-board salary increases for federal employees
were offset by other factors. The Federal Employees Pay
Comparability Act of 1990 specifies that the salaries
of most federal employees be adjusted annually on the
basis of changes in the salaries of private-sector workers. From 2005 through 2010, those changes averaged
2.7 percent, which was similar to the increase in the

salaries of private-sector workers during that period
as measured by the employment cost index compiled
by the Bureau of Labor Statistics (see Figure 5). From
2011 through 2015, however, policymakers chose to
implement smaller increases—averaging less than half a
percent—for federal employees. In contrast, salaries of
private-sector workers grew by an average of 1.9 percent
during those years. In addition to across-the-board pay
increases, federal employees can earn pay raises based on
their seniority and merit, but those raises did not expand
to offset the reduction in the across-the-board increases
over the 2011–2015 period (see Figure 6).14 Thus, the
lower across-the-board pay increases probably reduced
the wages of federal employees relative to the wages of
14. To further investigate the effects that the elimination of general
pay increases from 2011 through 2013 had on the difference
in average wages, CBO compared the average wage differential
between federal and private-sector employees during 2014 and
2015. By limiting the sample to the period after the pay freeze,
CBO found that the average federal wage exceeded the average
private-sector wage by 1 percent rather than 3 percent for the
entire 2011–2015 period.

18 Comparing the Compensation of Federal and Private-Sector Employees, 2011 to 2015

Figure 5.

Changes in Average Salaries, by Sector
Percentage Change per Year
3
Federal
Governmenta

Private
Sectorb

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The reduction in across-the-board salary increases
was also offset by the increase in federal hourly wages
caused by federal employees’ working fewer hours in
the 2011–2015 period than they had in the 2005–2010
period. In particular, salaried federal workers reported
fewer hours of work in 2013, the year in which many
federal employees were not allowed to work for the first
16 days of October.

2

Changes in the Comparisons of Benefits and Total
Compensation
1

0
2005–2010

2011–2015

Source: Congressional Budget Office, using data from the Office of
Personnel Management and the Bureau of Labor Statistics.
The salaries that the changes in this figure are based on have not been
converted to 2015 dollars.
a. Consists of across-the-board increases and changes in locality
payments for workers on the General Schedule, as well as general
market and structural pay adjustments for workers on other pay
schedules.
b. The change in the employment cost index for the salaries of workers
in private industry.

their private-sector counterparts by roughly 7 percent by
2015 and by an average of 4 percent over the 2011–2015
period. The lower pay increases—and higher pension
contributions mandated by policymakers—are evident
in the average wage of newly hired federal employees (see
Box 1).
The reduction in across-the-board salary increases was
partially offset by a decline in federal hiring. Hiring
fell from around 215,000 workers per year over the
2006–2010 period to around 165,000 workers per year
between 2011 and 2015. That drop in hiring increased
the average federal wage over what it would have been
otherwise, because the average salary of recently hired
federal employees is substantially lower than that of federal employees overall.

As with wages, the cost of federal benefits exceeded the
cost of private-sector benefits to a greater extent over the
2011–2015 period than over the 2005–2010 period for
workers with a bachelor’s degree or less. Conversely, for
workers with a master’s degree, the amount by which the
cost of federal benefits exceeded the cost of private-sector
benefits declined between the two periods. And among
workers with a professional degree or doctorate, the cost
of federal benefits was less than the cost of private-​sector
benefits in the 2011–2015 period, whereas federal benefits were more expensive than private-​sector benefits in the
2005–2010 period.
Changes in wages are largely responsible for the changes
in benefits (because the costs of pensions, paid leave,
and legally required benefits are closely tied to wages),
but increases in the cost of health insurance also played
a role. The amount employers contributed to their
workers’ health insurance grew more than wages in both
sectors, but that growth was more concentrated among
workers with higher earnings in the private sector, many
of whom are highly educated. Thus, the differences
between the cost of benefits for workers with more
education in the federal sector and the private sector
changed by a greater extent than the changes in wages
alone would suggest.
The differences in the total compensation of federal
workers and their private-sector counterparts with the
same educational attainment changed between the
2005–2010 period and the 2011–2015 period as the
differences in wages and benefits between those two
groups changed. In some instances, the changes in the
differences in total compensation between the two
groups were more pronounced than the changes in the

Comparing the Compensation of Federal and Private-Sector Employees, 2011 to 2015 19

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Figure 6.

Changes in Average Salaries for Federal Employees, Including Changes Based on Merit and Seniority
Percent

7
Across-the-Board Increases and
a
Changes in Locality Payments

6

Merit, Seniority, and All Other Pay
Changes

5

4

3

2

1

0

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Source: Congressional Budget Office, using data from the Office of Personnel Management.
The salaries that the changes in this figure are based on have not been converted to 2015 dollars.
In this figure, the composition of the workforce changes from year to year, and the change in salary reflects, in part, additional work experience.
a. Also includes general market and structural pay adjustments for workers who are not on the General Schedule.

differences in wages or benefits. The additional growth
in total compensation stemmed from more rapid growth
in benefits than in wages between the 2005–2010 and
2011–2015 periods, which made the difference in benefits
a larger share of the difference in total compensation.

For example, among workers with a bachelor’s degree,
the difference in total compensation grew by 6 percentage
points over the two periods, although the differences in
its two components, wages and benefits, grew by smaller
amounts.

20 Comparing the Compensation of Federal and Private-Sector Employees, 2011 to 2015

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Box 1.

Changes in Compensation for Newly Hired Federal Employees
Adjusted for private-sector wage growth, the compensation
the federal government provides to newly hired employees
decreased by about 11 percent between 2010 (the last year
examined in the Congressional Budget Office’s previous report
on compensation) and 2015 because lawmakers limited acrossthe-board increases to wages and raised the amount that new
employees contribute to the defined benefit pension (see the
figure).1 Over the 2011–2015 period examined in this report, those
policies had a smaller effect on average compensation for all
federal employees than for newly hired ones. CBO expects that
the changes will further reduce the pay of the federal workforce
over time as more employees are hired and as employees hired
before the changes were put in place retire or leave the federal
government. The changes also may hamper the government’s
ability to recruit a highly qualified workforce—especially among
workers whose jobs require advanced training—but analysis of
that issue is beyond the scope of this report.
From 2010 through 2015, salaries paid to new federal employees
declined by about 7 percent after adjusting for general changes
in the cost of labor. Policymakers limited across-the-board wage
increases to a total of 2 percent, which in turn constrained the
growth in the average salary of new employees to roughly the
same percentage. That is, without adjusting for general changes
in the cost of labor, the average salary of new employees in
2015 was roughly 2 percent more than the average salary of
similar new employees in 2010. Over the same six-year period,
the employment cost index for wages and salaries of workers in
private industry—a measure of changes in private-sector pay that
the Bureau of Labor Statistics adjusts so that the composition
of the workforce is similar from one quarter to the next—grew
by about 10 percent. Thus, adjusted for general changes in the
cost of labor, starting federal salaries fell by about 7 percent, on
average, between 2010 and 2015.
Lawmakers recently increased by 3.6 percentage points the portion
of new federal employees’ salaries that those employees must
contribute to their defined benefit pensions. First, the Middle Class
Tax Relief and Job Creation Act of 2012 increased the contribution
rate from 0.8 percent to 3.1 percent for most employees hired after
December 31, 2012. Then, the Bipartisan Budget Act of 2013 further
increased the contribution rate to 4.4 percent for most employees
hired after December 31, 2013. After that rise in contributions
was subtracted from compensation, the starting pay of federal
employees fell by an additional 4 percent between 2010 and 2015.
Thus, in total, average federal salaries for newly hired employees,
after taking into account contributions to defined benefit pensions
and general changes in the cost of labor, fell by about 11 percent
1.

Congressional Budget Office, Comparing the Compensation of Federal and
Private-Sector Employees (January 2012), www.cbo.gov/publication/42921.

Starting Pay of Federal Employees, by Year Hired
Thousands of 2015 Dollars
60
58
56

Average Salary

54
52

Average Salary Minus Contributions
to Defined Benefit Pension

50
0
2010

2011

2012

2013

2014

2015

Source: Congressional Budget Office, using data from the Office of
Personnel Management.
Average salaries are adjusted for changes over time in newly hired
federal employees’ educations, occupations, and certain other
observable characteristics likely to affect wages.

between 2010 and 2015. Because newly hired employees constitute
a small share of the federal workforce, the change had only a minor
effect on average compensation for all federal employees. However,
that effect is expected to grow over time as more employees are
hired, thereby reducing the difference in compensation between
the federal government and the private sector.
The increase in employees’ contributions to their defined benefit
pensions does not factor into the comparisons of benefits presented in this report because workers first hired after 2012 had
not yet accumulated the five years of service needed to receive
the defined benefit pension.2 If they leave federal employment,
most workers with fewer than five years of service choose to have
their contributions refunded to them at that time. However, once
those workers have served long enough to receive an annuity, the
cost of compensating them will be less than it would have been
under a lower contribution rate because the additional contributions from employees will reduce the portion of the pension
payments funded by the government.
2. This approach differs from the budgetary treatment of employees’
contributions to the defined benefit pensions; those contributions are
categorized as revenue when they are withheld from employees’ pay.
Under that treatment, the savings would still be a small fraction of the
cost of total compensation because most federal employees were hired
before 2013.

APPENDIX

A
CBO’s Analytic Approach

T

his appendix summarizes the analytic approach
taken by the Congressional Budget Office to
compare compensation in the federal government with that in the private sector. The
approach is broadly similar to that used by CBO in its
previous report comparing compensation in those sectors, although the analyses differ in several respects.1

Summarizing CBO’s Approach
In both the federal government and the private sector,
compensation may depend on a number of factors that
can be observed and measured. In its analysis, CBO
adjusted for differences between federal and private-​sector
workers in the following factors: education, occupation,
years of work experience, geographic location (region of
the country and urban or rural location), size of employer,
veteran status, and certain demographic characteristics
(age, sex, race, ethnicity, marital status, immigration
status, and citizenship).2 Those adjustments produced a
comparison between the average compensation of federal
workers and the average compensation of private-sector
workers who have certain similar observable attributes.
Because education plays an especially important role,
1. See Congressional Budget Office, Comparing the Compensation
of Federal and Private-Sector Employees (January 2012),
www.cbo.gov/publication/42921. For more details about the
methodology underlying both this report and that one, see Justin
Falk, Comparing Wages in the Federal Government and the Private
Sector, Working Paper 2012-3 (Congressional Budget Office,
January 2012), www.cbo.gov/publication/42922, and Comparing
Benefits and Total Compensation in the Federal Government and
the Private Sector, Working Paper 2012-4 (Congressional Budget
Office, January 2012), www.cbo.gov/publication/42923.
2. Such adjustments do not completely account for differences
in occupations and work experience between federal and
private-sector employees. Occupations are classified in 24 broad
categories, which in some instances group together federal
and private-sector workers who do not perform similar duties.
Experience is measured as the length of time that workers have
been in the labor force, based on their age and education. That
measure does not capture actual experience for people who may
have been unemployed or out of the labor force, however, nor
does it capture the relevance or quality of their work experience.

CBO reported its results for five levels of educational
attainment: high school diploma or less, some college,
bachelor’s degree, master’s degree, and doctorate or professional degree.
CBO analyzed hourly wages in the federal government
and the private sector using data for 2011 through
2015 from the Current Population Survey (CPS). That
survey of households by the Bureau of Labor Statistics
(BLS) and the Census Bureau contains a large amount of
information about the attributes and earnings (including
salary, overtime pay, tips, commissions, and bonuses)
of roughly 7,000 federal and 160,000 private-sector
workers over that period. CBO calculated hourly wages
by dividing workers’ annual earnings by the number
of hours they say they worked. CBO limited the CPS
sample to full-time, full-year workers, who accounted
for about 94 percent of the total hours worked by federal employees over the 2011–2015 period. CBO also
analyzed how the cost to employers of providing benefits
differed in the federal government and the private sector.
As with wages, differences in benefits can stem from disparities in various factors, including attributes of employees that can be measured easily, attributes that cannot be
measured easily, and the approaches used to determine
compensation in the two sectors. The CPS does not
include comprehensive information about employees’
benefits, so for that comparison, CBO supplemented the
CPS with data on the benefits of private-sector workers
from BLS’s National Compensation Survey and with
data on the benefits of federal workers maintained by the
Office of Personnel Management (OPM).3
The BLS and OPM data were used to calculate the
relationship in each sector between an employee’s wages
and the benefits that he or she receives. CBO then used
those relationships to estimate benefits for the workers
surveyed in the CPS, on the basis of their wages and
sector of employment. Using those estimates, CBO
3. OPM provided data from the Enterprise Human Resources
Integration Data Warehouse Statistical Data Mart, formerly
known as the Central Personnel Data File.

22 Comparing the Compensation of Federal and Private-Sector Employees, 2011 to 2015

compared the average cost of benefits for federal and
private-sector workers at the five levels of educational
attainment described above, with adjustments for the
other factors measured in the CPS (such as occupation,
years of work experience, demographic traits, location,
and size of employer). That approach allowed CBO to
compare the benefits of federal employees with those
of private-sector employees who have certain similar
job-related attributes—something not possible with the
data that other researchers have used for comparisons of
benefits. However, CBO’s estimates of the differences in
benefits between the two sectors are more uncertain than
its estimates of the differences in wages. That greater
uncertainty reflects the complexity of measuring benefits
and the extrapolations that were necessary to integrate
the CPS, BLS, and OPM data sets.

Differences Between the Approach in This
Report and That Used in the 2012 Report
For this report, CBO adjusted the distribution of
earnings of federal workers as reported in the CPS to
match the distribution of earnings of federal workers
as reported to OPM by federal agencies. The number
of federal employees is about 40 percent higher in the
survey data from CPS than in the data from OPM.
Moreover, the overestimate of federal workers in the CPS
is based largely on an overestimate of the share of federal
workers with relatively low wages. For instance, a relatively large share of federal employees reported working
in occupations that data from OPM indicate are uncommon among federal employees, such as teacher, child care
worker, and cashier. As a result, relying solely on the CPS
data would underestimate average wages among federal
employees. To correct for that, CBO used a statistical
matching technique to adjust the distribution of earnings
for federal workers in the CPS to match the distribution
of earnings for federal workers in the data from OPM.4
Those adjustments had the effect of reducing the number of federal workers in the CPS with low wages.

4. More specifically, CBO adjusted the relative weights placed
on those workers using methods from Nicole Fortin, Thomas
Lemieux, and Sergio Firpo, “Decomposition Methods in
Economics,” in Orley Ashenfelter and David Card, eds.,
Handbook of Labor Economics, Volume 4A (Elsevier, 2011),
pp. 1–101, http://tinyurl.com/ja9gdjy. In addition to adjusting
its analysis to match the distribution of earnings, CBO also
matched the distributions of age, sex, race, and ethnicity.

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Because many people who report federal employment
and low wages in the CPS also report relatively low
educational attainment and lower-than-average wages
for their educational group, the adjustment substantially
increased the average wages of federal workers with
less than a bachelor’s degree. To a lesser extent, it also
increased CBO’s estimates of the average wages of their
private-sector counterparts, because fewer private-sector
workers in low-wage occupations are included as counterparts. Still, the adjustment substantially increased the
extent to which the average wages of federal workers with
less than a bachelor’s degree exceeded the average of their
private-sector counterparts. However, the adjustment
had little effect on the comparison of overall averages,
because it also reduced the share of federal workers at
lower levels of education, thus decreasing the influence
of those workers on the overall average from what it
otherwise would have been.
CBO also adjusted for veteran status when comparing
wages, benefits, and total compensation of federal and
private-sector workers for this analysis. (By contrast, the
agency did not do so for the analysis covering the 2005–
2010 period). That adjustment was similar to the way
in which the agency adjusted for other characteristics of
workers, such as occupation and sex. In 2015, 22 percent
of federal civilian employees were veterans, based on data
from the CPS, compared with 5 percent of employees
in the private sector. (Data from OPM indicate that an
even larger share of federal workers—about 30 percent
in 2015—were veterans, but CBO used data from the
CPS because it measures veteran status consistently in
both sectors.) However, the adjustment for veteran status
had little effect on the pay comparisons. That is because
veterans’ wages are similar to the wages of other workers
after adjustments are made for differences in the other
factors incorporated into the analysis.

APPENDIX

B
Wages and Benefits for Federal Employees

T

he federal government compensates its
employees with a mix of wages and benefits.
Wages, which are mostly determined by various salary schedules, depend on an employee’s
job description, qualifications, experience, performance,
location, and other factors. Some benefits (such as pensions and paid leave) are determined mainly by formulas
that depend on a worker’s annual salary or hourly wage,
his or her years of service, and legal requirements that
affect all employees in the public and private sectors;
other benefits (such as health insurance) are largely
unrelated to those factors.
The salary schedules and formulas that govern federal
employees stem from classifications, guidelines, and laws
enacted over many decades, including the Classification
Act of 1949 and the Federal Employees Pay Comparability Act of 1990. The latter law states that federal salaries
should be set at rates that are comparable with nonfederal
salaries “for the same levels of work within the same local
pay area.”1

Wages
For most federal employees, salaries or wages are determined by their rank in a pay schedule.2 In particular,
the salaries of about 64 percent of federal workers are
based on the General Schedule, which consists of 15
pay grades—each with 10 pay levels, or “steps”—for 46
metropolitan areas. Cash compensation for other federal
employees is based on various other pay systems. Some
of those systems—such as the Federal Wage System,
which covers about 9 percent of federal workers—are
similar to the General Schedule; other systems differ
more. As of 2010, the most recent year for which the
Office of Personnel Management provided tabulations
for performance-based pay systems, about 12 percent

of federal employees were governed by such systems.
Those systems typically give managers more discretion in
setting an employee’s wages within the confines of ranges
that are determined by the employee’s job classification.3
The salary for any particular worker covered by a federal
pay schedule depends on the characteristics of the job
and of the person filling it. Job classifications—such as
statistician or nurse—are linked to different grade levels,
so wages and salaries are determined by the requirements
of the job. Employees’ qualifications and experience
also influence their rank in a pay schedule. Over time,
individual employees routinely move to higher levels of
pay by advancing through their pay schedule on the basis
of their experience and performance.4 Employees who
perform well can advance more quickly than average,
and employees who perform poorly can be denied such
step increases, but almost all federal workers compensated under the General Schedule move to progressively
higher grades as they are eligible. That system ensures
that employees in the same type of job who have similar
tenure receive similar pay, but it limits managers’ flexibility to reward workers who perform well or to constrain
the salaries of workers who perform poorly.

Benefits
Like many employers in the private sector, the federal
government also compensates its workers with noncash
benefits, such as retirement accounts, partial payment
of health insurance premiums, paid leave, and other
benefits.

1. Federal Employees Pay Comparability Act of 1990, 5 U.S.C.
§5301 (2012).

3. Some federal pay systems, such as the Senior Biomedical
Research Service, are designed to pay market-based rates to highly
educated workers. Those systems apply to a small fraction of the
federal workforce.

2. Federal workers are also eligible for cash awards and retention
allowances, but such incentives typically account for a small
portion of their total wages.

4. Federal pay systems are discussed in more detail in Congressional
Budget Office, Characteristics and Pay of Federal Civilian
Employees (March 2007), www.cbo.gov/publication/18433.

24 Comparing the Compensation of Federal and Private-Sector Employees, 2011 to 2015

APRIL 2017

Retirement

Paid Leave

Almost all federal workers participate in the Federal
Employees Retirement System (FERS) or the Civil
Service Retirement System (CSRS). In this analysis,
estimates of the cost of federal pension benefits focus on
FERS, which covers about 94 percent of current federal employees who work full time and almost all such
employees newly hired by the government. People who
began federal employment after 1983 are not eligible
to participate in CSRS, which was replaced by FERS.
Under both systems, the government provides most of
the funding for an employee’s pension, and the amount
of the pension depends on the employee’s salary, length
of federal service, and age at retirement. Federal workers
may also participate in the Thrift Savings Plan (TSP),
which is similar to 401(k) accounts in the private sector.
For employees subject to FERS, the federal government
matches a portion of their contributions to their TSP
accounts. (For workers subject to CSRS, those contributions are not matched by the government.)

Most federal employees receive 10 paid holidays a year;
they also earn between 13 and 26 days of annual leave
(vacation leave) per year depending on their length of
federal service. In addition, most federal workers are
eligible for up to 13 days of paid sick leave annually.

Health Insurance
Most federal workers are eligible to buy health insurance through the Federal Employees Health Benefits
program, and many federal retirees are eligible to retain
that coverage in retirement. On average, the government
pays about 70 percent of the cost of health insurance
premiums through that program.5

5. Specifically, the government pays the lesser of 72 percent of the
weighted average premium for all plans or 75 percent of the
premium for the plan an enrollee chooses.

Other Benefits
The federal government, like private-sector employers, is
required to pay for certain legally mandated benefits for its
current workers. Both the government and its employees
pay payroll taxes for Social Security, Medicare, workers’
compensation, and unemployment benefits. (Many federal
employees who participate in CSRS do not accrue Social
Security benefits and do not pay Social Security payroll
taxes; likewise, the federal government does not pay Social
Security taxes for those workers.)
The federal government and some employers in the
private sector also provide other types of benefits, such
as subsidies for employees’ education or commuting
expenses. Moreover, there are other benefits that only
the federal government provides, such as above-market
rate of return the federal government offers its employees
through the G Fund (one of the investment options in
the federal retirement plan), and some benefits that are
primarily provided by private-sector employers, such as
stock options. Those benefits are typically less costly than
retirement benefits, health insurance, and paid leave.
(Estimating the cost of those smaller benefits is beyond
the scope of this analysis.)

List of Tables and Figures

Tables
S-1. Differences in Average Hourly Compensation Between Federal and
Private-Sector Workers, by Educational Attainment

3

1.

Characteristics of the Federal and Private-Sector Workforces

8

2.

Federal and Private-Sector Wages, by Workers’ Educational Attainment

11

3.

Federal and Private-Sector Benefits, by Workers’ Educational Attainment

14

4.

Federal and Private-Sector Total Compensation, by Workers’ Educational Attainment

16

5.

Percentage Differences Between Federal and Private-Sector Compensation,
by Analytic Period

17

Figures
S-1. Average Compensation of Federal and Private-Sector Workers,
by Educational Attainment

2

1.

Trends in Government and Private-Sector Employment Since 1985

6

2.

Federal Civilian Employment, by Branch and Department, 2015

7

3.

Differences in Education and Occupation Between the Federal and
Private-Sector Workforces

9

4.

Dispersion of Federal and Private-Sector Wages, by Workers’ Educational Attainment

12

5.

Changes in Average Salaries, by Sector

18

6.

Changes in Average Salaries for Federal Employees, Including Changes
Based on Merit and Seniority

19

About This Document

This Congressional Budget Office report was prepared at the request of the Chairman of the
House Committee on Oversight and Government Reform. In keeping with CBO’s mandate to
provide objective, impartial analysis, this report makes no recommendations.
Justin Falk prepared the report with guidance from Joseph Kile and Molly Dahl. Robert Arnold,
Elizabeth Bass, Jordan Berne, Holly Boras, William Carrington, Heidi Golding, Jeffrey Holland,
Nadia Karamcheva, Kim Kowalewski, Amber Marcellino, Carla Tighe Murray, Daniel Ready,
Felix Reichling, Chayim Rosito, Stephanie Ruiz, John Seliski, and David Torregrosa provided
comments.
Sergio Firpo of the Insper Institute of Education and Research and Nicole Fortin of the
University of British Columbia also commented. The Bureau of Labor Statistics and the Office
of Personnel Management provided data. (The assistance of external reviewers and those agencies
implies no responsibility for the final product, which rests solely with CBO.)
Wendy Edelberg, Mark Hadley, and Jeffrey Kling reviewed the report, Christine Bogusz edited it,
and Jorge Salazar prepared it for publication. An electronic version is available on CBO’s website
(www.cbo.gov/publication/52637).

Keith Hall
Director
April 2017