ABSTRACT
This study uses data from the Indonesian Family Life Survey (IFLS) to see whether there are differences between the wages of observably comparable public and private sector employees. This study also displays indications of unreported income among public-sector employees. This is shown by using private-sector employees as a control group and comparing the consumption profiles of both types of employees; we find that public employees consume more of their reported income than a comparable private employee. Finally, this paper reports that households with at least one public employee are more prone to report consumption levels above their income levels compared to households without public employees, thereby strengthening the case that public employees receive more income than they report.
