The Consequences of The Decline in Public Sector Pay in Britain: A Little Bit of Evidence

Following the fall in overall net public investment, the relative pay of most public sector workers in the United Kingdom declined sharply after the mid-1970s. For example, the relative pay of male teachers fell by over 10 percentage points from the late 1970s to the late 1980s. So has this generated a fall in quality? Using age 10/11 test score percentile positions as an indicator, we find that men entering non-manual public sector occupations in the early 1990s had a significantly lower test score position than those entering in the late 1970s. No such falls were exhibited by women. Copyright Royal Economic Society 2002