An examination of the public sector wage premium in Canada

There is a long history of studying the differences in pay between the private sector and the public sector both in Canada and internationally. The original theory was that the private sector, because it was constrained by its profits and therefore by market discipline, would be better able to control wages. The public sector, for its part, does not have a profit constraint and so economists theorized that workers in the public sector would have higher wages as a result. Six academic studies of this thesis have been conducted to date in Canada (this excludes non-academic work like that of the CFIB).