Comparing Government and Private Sector Compensation in Ontario, 2019

Main Conclusions

• Using data on individual workers from January to December 2018, this report estimates the wage differential between the government and private sectors in Ontario. It also evaluates four non-wage benefits for which data are available to quantify compensation differences between the two sectors.
• After controlling for factors like gender, age, marital status, education, tenure, size of firm, job permanence, immigrant status, industry, occupation, and full- or part-time status, the authors found that Ontario’s government-sector workers (federal, provincial, and local) enjoyed a 10.3% wage premium, on average, over their private-sector counterparts in 2018. When unionization status is factored into the analysis, the wage premium for the government sector declines to 7.3%.
• The available data on non-wage benefits suggest that the government sector enjoys an advantage over the private sector. For example, 82.7% of government workers in Ontario are covered by a registered pension plan, compared to 24.6% of private-sector workers. Of those covered by a registered pension plan, 94.8% of government workers enjoyed a defined benefit pension compared to 39.8% of private-sector workers.
• In addition, government workers retire earlier than their private-sector counterparts— about 2.0 years on average—and are much less likely to lose their jobs (2.3% in the private sector compared to 0.5% in the public sector).
• Moreover, full-time workers in the government sector lost more work time in 2018 for personal reasons (13.7 days on average) than their private-sector counterparts (7.8 days).