Survey finds major differences in public sector earnings

A joint survey by the World Bank and Romania’s Ministry of Labour, Family and Social Protection has found major differences in income levels in public sector jobs and between base pay and variable additional earnings in the sector. The survey, which was published in June 2008, gives a detailed analysis of employment and earnings in the sector. It also makes various proposals, including the reform of public sector salary policies to attract more qualified workers to the sector.

About the survey

In June 2008, the World Bank (WB) Poverty Reduction and Economic Management Unit, Europe and Central Asia Region, in cooperation with the Ministerul Muncii, Familiei şi Protecţiei Sociale (MMFPS, Ministry of Labour, Family and Social Protection), published the survey ‘Salary procedures in the public sector in Romania’.

The survey was based on a questionnaire distributed in December 2007, which collected data from 166 local administration bodies – more specifically, 122 communes, 20 townships, 18 municipalities and six counties. The data covered the period 2005–2007.

The purpose of the survey was to help the MMFPS assess current salary practices in the public sector, and provide useful recommendations for drafting a uniform public sector salary law.

Main findings

Brief description of employment in public sector

In 2007, the public sector consisted of about 1.45 million jobs – increasing from 1.32 million jobs in 2005 – which represented approximately 30% of all employees in Romania.

In terms of the structure of public employment in 2007, the breakdown was as follows: 29% of public sector workers were employed as civil servants and contract staff, 28% worked in education, 19% were special public service workers such as police, army personnel and firefighters, 15% worked in the health system, while 9% were employed in central and local bodies or in self-financed entities.

Earnings and gross wages structure

The total expenditure on public sector workers amounted to 5.3% of gross domestic product (GDP) in 2005 and to 6.5% in 2007.

Compared with 2005, base salaries in 2007 grew in real terms by 29% in pre-academic education, by 22.7% in special public services such as the police force and army, by 20.9% in the health system, and by 17.9% in central and local public administration.

The main conclusions arising from a comparative study of the survey data are as follows.

• Despite the significant growth in gross wages in recent years, the public sector appears to have been less capable in attracting and maintaining a qualified workforce. Salary increases have therefore sought to reduce the loss of trained personnel to better paid jobs in the private sector.

• Additional salary entitlements vary between the categories of employees. The proportion of total personnel expenditure accounted for by the base salary is significantly lower in some categories and differs considerably across occupations, ranging from 26% to 50% (see table).

• The survey also shows that, in the case of contract workers in local administration bodies, the base salary for executive positions constitutes 78.4% of all earnings for those with an upper secondary school education, and 76.6% for holders of an academic degree; among management positions, the base salary accounts for 60.1% of all earnings for contract workers with an upper secondary education, and to 49% for those with an academic degree.

• Overall, employment in the public sector is not very attractive to workers, and the salaries and other salary entitlements are not always commensurate to the specific duties of the job, the quality of work, or the degree of responsibility placed on the various types of key personnel.