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Comparing the Compensation of Federal and Private-Sector Employees in 2022

In this report, the Congressional Budget Office compares the cost that the federal government incurred in 2022 for the wages and benefits of its civilian employees with the cost that private employers incurred for employees who appear similar in their educational attainment and other observable characteristics likely to affect wages.

  • Wages. For federal civilian workers whose highest level of education was a bachelor’s degree or more, the cost of wages in 2022 was less, on average, than the cost for private-sector workers with similar observable characteristics. Among workers with less education, federal workers’ wages cost more than those of their counterparts in the private sector, on average.
  • Benefits. For employees at most levels of educational attainment, the cost of federal benefits—including retirement benefits and paid leave—exceeded the cost of benefits for their private-sector counterparts in 2022. Those differences in benefits were smaller for workers with more education.
  • Total compensation. For federal workers whose highest level of education was a master’s degree or more, the cost of total compensation (the sum of wages and benefits) was less, on average, than the cost for their counterparts in the private sector. For workers with less education, the government spent more on total compensation than it would have if average compensation had been comparable with that in the private sector, after accounting for certain observable characteristics.
  • Comparison with the findings in CBO’s 2017 report. CBO’s previous comparison of federal and private-sector compensation covered the period from 2011 to 2015. By 2022, federal compensation had declined relative to private-sector compensation, primarily because lawmakers enacted across-the-board salary increases for federal employees that were smaller than wage growth in the private sector.
  • Other job attributes that affect recruitment and retention. Job security, deferred compensation, and the flexibility to work from home are other job attributes that workers may value. By offering more of those job attributes, the federal government and private-sector employers can recruit and retain a highly qualified workforce while spending less on wages and benefits. Federal employment offers more security than many jobs in the private sector, making federal employment more attractive for workers. But a greater share of federal compensation is deferred until retirement, which many workers find less valuable than wages. Federal employees and their private-sector counterparts teleworked at roughly similar rates in 2022.

Originally published at https://www.cbo.gov/publication/59970

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