Executive Summary
Compensation for government employees is an active policy issue in Illinois and across the
country, both because of the rising budgetary costs of employee pay and benefits and because
of the public’s perception that public sector workers often receive a more generous pay package
than private sector workers. This study uses U.S. Census data to analyze salaries and benefits for
Illinois state government employees in non-public safety occupations, comparing them to the pay
and benefits of similar workers employed in the private sector. The study controls for differences
between public and private employees in education, experience and other factors that influence
pay. After controlling for these factors, salaries are very comparable between the public and
private sectors: Illinois state employees receive average salaries that are 7.2 percent below private
sector levels. However, benefits are far more generous in the public sector. We measure the values
of both benefits paid to employees in a given year, such as health coverage and paid time off, as
well as the value of future pension and retiree health benefits accruing to employees in that year.
Illinois private sector employees receive annual benefits equal to about 32.3 percent of their annual
salaries. Illinois state government employees, by contrast, receive benefits equal to 98.0 percent
of salaries. This difference is mostly due to pensions and retiree health coverage, which are far
more generous in state government than in the private sector. Overall compensation for Illinois
state government employees is 39.6 percent higher than is paid to private sector employees with
comparable earnings-related characteristics such as education and experience, a difference that
is entirely due to more generous fringe benefits. Reform of public employee pensions and retiree
health care programs, whose rising costs are placing pressure on the state budget, could make
total compensation more equitable between the public and private sectors.
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