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Answers to Questions for the Record following a Hearing on Federal Employee Compensation Conducted by the House Committee on Oversight and Government Reform 1 (June 30, 2017)

handle is hein.congrec/cbo3599 and id is 1 raw text is: JUNE 30, 2017 Answers to Questions for the Record Following a Hearing on Federal Employee Compensation Conducted by the House Committee on Oversight and Government Reform On May 18, 2017, the House Committee on Oversight and Government Reform convened a hearing at which Joseph Kile, the Congressional Budget Offce' Assistant Director for Micro- economic Studies, testified on the agency' comparison of compensation between federal civilian employees and private-sector employees (www.cbo.gov/publication/52707). After the hearing, Chairman Meadows ofthe Subcommittee on Government Operations submitted questions for the record. This document provides CBO's answers. Question. The American Federation of Government Employees (AFGE) has critiqued aspects of the Congressional Budget Office (CBO) study, saying it is not an accurate por- trayal of the federal employee compensation differential. According to information provided to Committee staff, you will be engaging with AFGE in the coming weeks to discuss the methodology used in your report. After such meeting and pursuant to my request at the hearing, please respond to the criticisms leveled at your report by AFGE. Please discuss CBO's treatment of demographic traits, including education, in the report. What was the reason for sorting employees by educational attainment? What are the benefits of doing so? Please respond to any additional criticisms of your report you discussed with AFGE. Answer. On June 12, 2017, CBO discussed the concerns raised in the AFGE testimony with Jacqueline Simon and another AFGE staff member.) Those concerns related to CBO's adjustments for differences in demographic traits between the federal and private-sector workforces, its comparison of federal and private-sector compensation by workers' level of education, and the approach it used to compare benefits between the sectors. In its analysis, CBO adjusted for differences between federal and private-sector employees in various demographic traits (age, sex, race, ethnicity, marital status, immigration status, and citizenship) as well as education, years of work experience, occupation, size of employer, geographic location, and veteran status. Adjusting for differences in demographic traits is common practice when comparing compensation between two groups because some demo- graphic traits are correlated with unobservable characteristics that can affect compensation. For example, if immigrants tend to be less proficient in English than native-born workers, then adjusting for immigration status will account for some of the differences in English proficiency between federal and private-sector workers even though English proficiency was not observable in the data. If adjustments for demographic traits had substantially changed the estimated differences in compensation between the sectors, then it would have been 1. See testimony of Jacqueline Simon, Policy Director, American Federation of Government Employees, before the House Committee on Oversight and Government Reform (May 18, 2017), https://go.usa.gov/xNGud.

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