Government Wage Review Policy and Public-Private Sector Wage Differential in Nigeria

The study investigated the impact Nigeria’s government wage review of 1998 had on the differential in pay for public and private sector workers of the same educational qualifications and ages. Empirical analysis based on the Mincerian human capital model was carried out for urban male employees only (as they constitute a homogeneous group) in the public and private sectors. The results obtained show that before the wage review of 1998, public sector workers suffered a pay disadvantage of 6.78% while about one year after the review, public sector workers enjoyed a premium of 35.07%. In the absence of any wage reduction in the private sector, this result suggests that the implementation of the 1998 wage review succeeded in making public sector workers better remunerated than their private sector counterparts and it can be concluded that the wage increase in the public sector achieved its disguised goal of redressing the age-long poor pay in the sector.