State employees were earning up to 25% more than private sector workers in 2006, according to a new report by the Economic and Social Research Institute. But the CPSU union has questioned the findings.

Authors Elish Kelly, Seamus McGuinness and Philip O'Connell stress that this latest research does not capture the effect of the last year's downturn, or the state pension levy.

However, they say that the results raise serious questions regarding the justification for any further boost in pay for state employees.

The ESRI found that in 2003, public sector workers earned on average 9.7% more than their private sector counterparts - but that by 2006, that gap had risen to 21.6%.

However, when the value of public sector pensions is factored in, the pay gap widens to almost 25%.

The authors also note that their estimate of the benefit of a public sector pension is conservative.

The ESRI report does not take account of the value of guaranteed job security when employed by the state.

It finds that the gap is particularly acute among junior staff - with some of those in lower level state grades earning up to 31% more.

Senior state employees earn on average 8% more than private sector senior workers.

Male state employees earn on average 23% more than private sector male workers. Female state workers earn 21% more than females in equivalent private sector positions.

The authors point to a warning from the International Monetary Fund that generous increases in public wages contributed to a drop in competitiveness in recent years by pushing up wages in other sectors of the economy.

They say that their findings indicate not only that there was no justification for increases in the 2007 benchmarking exercise, but that any more increases would further undermine Ireland's current drive to regain competitiveness.

CPSU chief rejects findings

The general secretary of the Civil Public and Services Union, Blair Horan, said the ESRI report did not compare like with like, and did not examine the content or level of responsibility of jobs in both sectors.

'No conclusions about pay comparison can be drawn from such an exercise,' said Mr Horan. 'While this type of analysis has been used to measure gender pay gaps, even there it can only point to unexplained differences,' he added.

Meanwhile, the Taoiseach has the issue of public sector pay and pensions is something that will be considered in the Budget. He said it was important not to get involved in 'word games' in the meantime. Speaking at the ATSR plant in Tullamore this morning, Mr Cowen also said the Government was committed to a carbon tax measure in the next Budget.