Public Sector Struggles to Retain Top Talent as Private Sector Offers Higher Rewards
The study looked at how changes in pay for educated workers affect their job movement between public and private sectors in Israel from 1995 to 2005. They found that private sector wages for educated workers increased more than in the public sector during this time. This led to a higher chance of highly educated workers switching from the public sector to the private sector, and a lower chance of them moving in the opposite direction. Overall, the public sector pays less for skills compared to the private sector, and this wage gap widened over the years studied.