Skip to main content

Public Sector Employment Inequality in the United States and the Great Recession


Historically in the United States, the public sector has served as an equalizing institution through the expansion of job opportunities for minority workers. This study examines whether the public sector continues to serve as an equalizing institution in the aftermath of the Great Recession. Using data from the Current Population Survey, I investigate changes in public sector employment between 2003 and 2013. My results point to a post-recession double disadvantage for black public sector workers: they are concentrated in a shrinking sector of the economy, and they are more likely than white and Hispanic public sector workers to experience job loss. These two trends are a historical break for the public sector labor market. I find that race and ethnicity gaps in public sector employment cannot be explained by differences in education, occupation, or any of the other measurable factors that are typically associated with employment. Among unemployed workers who most recently worked for the public sector, black women are the least likely to transition into private sector employment.

This is a preview of subscription content, access via your institution.

Fig. 1
Fig. 2
Fig. 3
Fig. 4
Fig. 5
Fig. 6
Fig. 7


  1. 1.

    The majority of public sector workers are employed by local government; less than one-fifth are employed by the federal government.

  2. 2.

    In this article, I treat blacks, whites, and Hispanics as separate categories: “black” refers to non-Hispanic black, and “white” refers to non-Hispanic white. Within each gender group, Hispanics have lower public sector representation rates than both whites and blacks (see Table 1).

  3. 3.

    Not all public sector jobs are good jobs. In both the private and the public sectors, black workers have a lower median wage than whites, and women have a lower median wage than men (results of weekly earnings models available upon request). However, black-white and male-female income inequality is significantly lower in the public sector, even after public-private differences in occupation and education are controlled for (Gornick and Jacobs 1998; Grodsky and Pager 2001). Using data from the Panel Study of Income Dynamics (1976–1998), Heywood and Parent (2012) reported that although the raw black-white wage gap in the public sector is positive and significant, the gap disappears after observable characteristics (e.g., education, experience, region, occupation) are controlled for. Heywood and Parent attributed the absence of a positive wage gap between similarly situated white and black workers in the public sector to explicit pay scales and rules determining compensation.

  4. 4.

    Members of the military who reside in military barracks are excluded from the CPS. Because the CPS is designed to measure unemployment in the civilian labor force, members of the armed forces are not part of the universe for many employment-related questions. For these reasons, members of the armed forces are not included in this analysis.

  5. 5.

    Those who are not working, available for work, have looked for a job during the past year but not during the past four weeks are considered by the BLS to be discouraged workers. Approximately 77 % of the 3,885 discouraged workers in the CPS sample have missing occupation information and are therefore dropped from this analysis. Given that discouraged workers are disproportionately male and black, the CPS results most likely underestimate employment disadvantages among men and among blacks.

  6. 6.

    I use the CPS “two-digit” detail occupation recode. The categories are management, business, and financial operations; computer and mathematical science; architecture and engineering; life, physical, and social science occupations; legal occupations; education, training, and library occupations; arts, design, entertainment, sports, and media occupations; healthcare practitioner and technical occupations; healthcare support occupations; protective service occupations; food prep and serving occupations; building and grounds cleaning and maintenance; personal care and service; sales; office and administrative support; farming, fishing, and forestry; construction and extraction; installation, maintenance, and repair; production; and transportation and material moving. I use this occupation scheme because it identifies occupation groups that were disproportionately affected by the recent recession (e.g., administrative support and construction). With several hundred categories, the more detailed occupation scheme would yield cell counts that are too small to quantify race differences within sectors.

  7. 7.

    For public sector workers, veteran status should theoretically reduce the odds of unemployment because preference for veterans is commonly used in in the civil service hiring process (Ban 1995; Lewis 2013). I did not find that veteran status reduced the odds of unemployment in any of my models (even those restricted to the public sector).

  8. 8.

    The independence of irrelevant alternatives assumption of multinomial logit requires that an individual’s probability of being in one outcome category relative to another outcome category should not change if a third (irrelevant) category is added to or dropped from the analysis (e.g., there is a chance that an individual’s probability of voting for a Democrat versus a Republican will change if a third-party candidate is added to the ballot). Under the independence of irrelevant alternatives (IIA) assumption, no systematic change should be evident in the coefficients if one of the outcomes is excluded from the model. I performed a Hausman test for a violation of IIA, comparing the results from the full model and a model that excludes those who are not in the labor force. According to the results of the Hausman test (available upon request), I find no evidence that the IIA assumption is violated in this analysis.

  9. 9.

    I use the tile package in R to produce the figures in this analysis (Adolph 2016).

  10. 10.

    In models that combine public and private sector workers, I find statistically significant interactions between sector (public vs. private) and other predictors of employment, including education, age, and occupation (results available upon request). For this reason, I model employment separately for public and private sector workers. Online Resource 1 includes models predicting the odds of not being in the labor force, as well as results for the private sector. The coefficients in the tables in Online Resource 1 show that the race gaps in unemployment cannot be attributed to differential likelihoods of being out of the labor force.

  11. 11.

    Who is the typical federal, state, or local government employee? Approximately one-quarter of state employees and one-third of local government employees are teachers. Nearly one-third of federal employees work in office or administrative support occupations; one-half of federal administrative support workers are postal workers. Among all public sector employees, 50 % work for local governments, 30 % work for state governments, and nearly 20 % work for the federal government.

  12. 12.

    The CPS does not have enough minority public sector workers in every state to allow a state-level analysis. The large samples in the American Community Survey (ACS) are better suited for an analysis of state-level variation in public sector employment, but the ACS does not measure the timing of employment as precisely as the CPS. (ACS responses can relate to any weekly period throughout the year, whereas CPS responses refer to a particular week.) Figure S1 in Online Resource 1 shows state and local government employment rates in the ACS for those states that had at least 100 black public sector workers (men and women) in 2008.


  1. Abramovitz, M. (2012). The feminization of austerity. New Labor Forum, 21, 32–41.

    Article  Google Scholar 

  2. Adolph, C. (2016). tile [R package]. Retrieved from

  3. Akerlof, G. A., & Yellen, J. L. (1985). Unemployment through the filter of memory. Quarterly Journal of Economics, 100, 747–773.

    Article  Google Scholar 

  4. Ban, C. (1995). How do public managers manage? San Francisco, CA: Jossey-Bass Publshers.

    Google Scholar 

  5. Blank, R. M. (1985). An analysis of workers’ choice between employment in the public and private sectors. Industrial and Labor Relations Review, 38, 211–224.

    Article  Google Scholar 

  6. Blank, R. M. (1994). Public sector growth and labor market flexibility: The United States versus the United Kingdom. In R. M. Blank (Ed.), Social protection versus economic flexibility: Is there a trade-off? (pp. 223–264). Cambridge, MA: National Bureau of Economic Research.

    Chapter  Google Scholar 

  7. Bureau of Labor Statistics. (2012). Employment situation of veterans—2011. Washington, DC: U.S. Department of Labor.

    Google Scholar 

  8. Bureau of Labor Statistics. (2016). Employment statistics. Retrieved from

  9. Caplow, T., Hicks, L., & Wattenberg, B. J. (2001). The first measured century: An illustrated guide to trends in America, 1900–2000. Washington, DC: AEI Press.

    Google Scholar 

  10. Carrington, W. J., McCue, K., & Pierce, B. (1996). Black/white wage convergence: The role of public sector wages and employment. Industrial and Labor Relations Review, 49, 456–471.

    Article  Google Scholar 

  11. Center for State and Local Government Excellence. (2012). State and local government workforce: 2012 trends. Washington, DC: Center for State and Local Government Excellence. Retrieved from

  12. Cooper, D., Gable, M., & Austin, A. (2012). The public-sector jobs crisis (EPI Briefing Paper No. 339). Washington, DC: Economic Policy Institute.

  13. Dewan, S., & Rich, M. (2012, June 20). Public workers face new rash of layoffs, hurting recovery. The New York Times. Retrieved from

  14. Drew, J. A., Flood, S., & Warren, J. R. (2014). Making full use of the longitudinal design of the Current Population Survey: Methods for linking records across 16 months. Journal of Economic and Social Measurement, 39, 121–144.

    Google Scholar 

  15. Elsby, M. W. L., Hobijn, B., Sahin, A., & Valletta, R. G. (2011). The labor market in the Great Recession—An update to September 2011. Brookings Papers on Economic Activity, Fall, 353–371.

  16. Farber, H. S. (2005). What do we know about job loss in the United States? Evidence from Displaced Worker Survey, 1984–2004. Economic Perspectives, 2Q/2005, 1–28.

  17. Goldhaber, D., & Theobald, R. (2013). Managing the teacher workforce in austere times: The implications of teacher layoffs. Education Finance and Policy, 8, 494–527.

    Article  Google Scholar 

  18. Gordon, T. (2012). State and local budgets and the Great Recession. Stanford, CA: Stanford Center on Poverty and Inequality.

    Google Scholar 

  19. Gornick, J. C., & Jacobs, J. A. (1998). Gender, the welfare state, and public employment: A comparative study of seven industrialized countries. American Sociological Review, 63, 688–710.

    Article  Google Scholar 

  20. Grandjean, B. D. (1981). History and career in a bureaucratic labor market. American Journal of Sociology, 86, 1057–1092.

    Article  Google Scholar 

  21. Grodsky, E., & Pager, D. (2001). The structure of disadvantage: Individual and occupational determinants of the black-white wage gap. American Sociological Review, 66, 542–567.

    Article  Google Scholar 

  22. Grusky, D. B., Western, B., & Wimer, C. (2011). The Great Recession. New York, NY: Russell Sage Foundation.

    Google Scholar 

  23. Hellriegel, D., & Short, L. (1972). Equal employment opportunity in the federal government: A comparative analysis. Public Administration Review, 32, 851–858.

    Article  Google Scholar 

  24. Heywood, J. S., & Parent, D. (2012). Performance pay and the white-black wage gap. Journal of Labor Economics, 30, 249–290.

    Article  Google Scholar 

  25. Hollister, M. (2011). Employment stability in the U.S. labor market: Rhetoric versus reality. Annual Review of Sociology, 37, 305–324.

    Article  Google Scholar 

  26. Horvath, F. E. (1982). Forgotten unemployment: Recall bias in retrospective data. Monthly Labor Review, 150, 40–43.

    Google Scholar 

  27. Hout, M. (1984). Occupational mobility of black men: 1962 to 1973. American Sociological Review, 49, 308–322.

    Article  Google Scholar 

  28. Johnson, R. W., & Mommaerts, C. (2011). Age differences in job loss, job search, and reemployment (Program on Retirement Discussion Paper 11–01). Washington, DC: Urban Institute.

  29. King, M., Ruggles, S., Alexander, J. T., Flood, S., Genadek, K., Schroeder, M. B., . . . Vick, R. (2010). Integrated Public Use Microdata Series, Current Population Survey: Version 3.0[Machine-readable database]. Minneapolis, MN: Minnesota Population Center [producer and distributor].

  30. King, M. C. (2003). Black women’s breakthrough into clerical work: An occupational tipping model. In E. Mutari & D. M. Figartl (Eds.), Women and the economy: A reader (pp. 221–233). Armonk, NY: M.E. Sharpe.

    Google Scholar 

  31. Kleykamp, M. (2013). Unemployment, earnings, and enrollment among post 9/11 veterans. Social Science Research, 42, 836–851.

    Article  Google Scholar 

  32. Krislov, S. (1967). The Negro in federal employment: The quest for equal opportunity. Minneapolis: University of Minnesota Press.

    Google Scholar 

  33. Kroft, K., Lange, F., Notowidigdo, M. J., & Katz, L. F. (2014). Long-term unemployment and the Great Recession: The role of composition, duration dependence, and non-participation (NBER Working Paper No. 20273). Cambridge, MA: National Bureau of Economic Research.

  34. Lewis, G. B. (2013). The impact of veterans’ preference on the composition and quality of the federal civil service. Journal of Public Administration Research and Theory, 23, 247–265.

    Article  Google Scholar 

  35. Morgenstern, R. D., & Barrett, N. S. (1974). The retrospective bias in unemployment reporting by sex, race, and age. Journal of the American Statistical Association, 69, 355–357.

    Article  Google Scholar 

  36. Oliff, P., Mai, C., & Palacios, V. (2012). States continue to feel recession’s impact (Report). Washington, DC: Center on Budget and Policy Priorities.

  37. Parks, V. (2011). Revisiting shibboleths of race and urban economy: Black employment in manufacturing and the public sector compared, Chicago 1950–2000. International Journal of Urban and Regional Research, 35, 110–129.

    Article  Google Scholar 

  38. Pitts, S. (2011). Research brief: Black workers and the public sector. Berkeley: University of California, Berkeley Center for Labor Research and Education.

    Google Scholar 

  39. Sites, W., & Parks, V. (2011). What do we really know about racial inequality? Labor markets, politics, and the historical basis of black economic fortunes. Politics & Society, 39, 40–73.

    Article  Google Scholar 

  40. Skocpol, T., & Williamson, V. (2012). The Tea Party and the remaking of Republican conservatism. New York, NY: Oxford University Press.

    Book  Google Scholar 

  41. Smith, S. (1977). Equal pay in the public sector: Fact or fantasy. Princeton, NJ: Princeton University.

    Google Scholar 

  42. Stevenson, B., & Langan, A. (2011). Comment and discussion [on “The labor market in the Great Recession—An update to September 2011”]. Brookings Papers on Economic Activity, Fall, 372–384.

  43. Tomaskovic-Devey, D. (1993). Gender and racial inequality at work: The sources and consequences of job segregation. Ithaca, NY: Cornell University Press.

    Google Scholar 

  44. U.S. Census Bureau. (2012). Annual survey of public employment and payroll summary report: 2010 (Report G10-ASPEP). Washington, DC: U.S. Department of Commerce.

  45. U.S. Department of Labor Women’s Bureau. (1975). 1975 handbook on women workers (Bulletin 297). Washington, DC: U.S. Government Printing Office.

    Google Scholar 

  46. U.S. Department of Labor Women’s Bureau. (1983). Time of change: 1983 handbook on women workers (Bulletin 298). Washington, DC: U.S. Government Printing Office.

    Google Scholar 

  47. Wilson, G., Roscigno, V. J., & Huffman, M. L. (2013). Public sector transformation, racial inequality and downward occupational mobility. Social Forces, 91, 975–1006.

    Article  Google Scholar 

  48. Zipp, J. F. (1994). Government employment and black-white earnings inequality, 1980–1990. Social Problems, 41, 363–382.

    Article  Google Scholar 

Download references


This research was supported by NICHD Training Grant 5T32HD007543 to the Center for Studies in Demography and Ecology at the University of Washington. Thanks to Jake Rosenfeld, Stew Tolnay, Kyle Crowder, and anonymous reviewers for insights on prior versions of this article.

Author information



Corresponding author

Correspondence to Jennifer Laird.

Electronic supplementary material


(PDF 1005 kb)

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Laird, J. Public Sector Employment Inequality in the United States and the Great Recession. Demography 54, 391–411 (2017).

Download citation


  • Employment
  • Race
  • Gender
  • Recession