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The higher pay level in central government is caused by differences in the occupational and educational structures compared with the other sectors

The average pay level in central government is higher than in the private and local government sectors. This is not, however, visible in the pay comparison by occupational group, because average earnings are higher in several occupational groups in the private sector than in the other sectors (Table 1). For example, the average pay of associate professionals was EUR 3,448 in the private sector, EUR 3,297 in the central government sector and EUR 2,829 in the local government sector in 2012.

Table 1. Average earnings of full-time wage and salary earners by occupational group and employer sector in 2012

Classification of Occupations 2010	Total earnings, EUR/month
	Private sector	Local government	Central government	Total
Total	3 279	2 932	3 647	3 206
1 Managers	6 196 1)	4 664	6 328	5 911
2 Professionals	4 315	3 777	4 180	4 104
3 Technicians and associate professionals	3 448	2 829	3 297	3 269
4 Clerical support workers	2 663	2 311	2 628	2 601
5 Service and sales workers	2 421	2 354	3 172	2 413
6 Skilled agricultural, forestry and fishery workers	2 054	2 305	2 724	2 272
7 Craft and related trades workers	2 910	2 580	2 826	2 897
8 Plant and machine operators, and assemblers	2 928	2 453	2 722	2 917
9 Elementary occupations	2 292	2 063	2 268	2 224

1) Top management of enterprises is missing

The higher average earnings in central government are explained by the fact that the occupational and educational structures differ from the other sectors. In relative terms, more professionals and associate professionals are working in the central government sector than in the other sectors. The level of education is also higher inside occupational groups in central government than in the other sectors, on average. Police and prison guards classified as service and sales workers, whose average earnings are considerably higher than those of service and sales workers employed in the other sectors, raise average earnings in the central government sector.

Figure 1 illustrates the effect of the occupational structure and level of education on the pay differential between the central government and private sectors. In the Figure, "pay differential" describes the difference in average earnings. "Standardised pay differential" depicts the pay differential between the sectors, when the effect of the occupational group (on 1-digit level) and level of education is standardised. The standardisation of the occupational group and level of education in practice means that the wages and salaries of persons working in the same occupational group and with the same level of education are compared with each other.

Figure 1. Pay differential between the central government and private sectors in 2003 and 2012

In 2003, the monthly average earnings of full-time wage and salary earners were 2 per cent higher in the central government sector than in the private sector. If the wages and salaries are compared between persons in the same occupational group and with the same level of education, earnings were around 12 per cent lower in the central government sector than in the private sector in 2003. In 2012, average earnings were 13 per cent higher in central government than in the private sector. When the occupational and educational structures are taken into account, average earnings in central government corresponded to average earnings in the private sector in 2012.

In Figure 1, the bars on the right illustrate what effect the occupational category "5 Service and sales workers" has on the pay differential between the central government and private sectors. If occupational category 5 including police and prison guards is not taken into account in the pay comparison, the pay differential between the central government and private sectors falls and the standardised pay differential increases. Without occupational group 5, the pay differential standardised for occupation and education and calculated for the year 2012 is four per cent in favour of the private sector.

Source: Structure of Earnings 2012, Statistics Finland

Inquiries: Sampo Pehkonen 09 1734 3452, Mika Idman 09 1734 3445, palkkarakenne@stat.fi

Director in charge: Hannele Orjala

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Updated 11.10.2013