A model correcting for selectivity bias from labor force participation and sectoral choice is estimated for both whites and African-Americans in the public and private sectors. White males earn significantly more than white females in both sectors, although the gender gap is smaller in the public sector. For African-Americans, the gender wage gap is positive in the private sector but insignificant in the public sector. Sample selectivity is significant and alters the magnitude of the measured wage gaps. Results indicate that a decline in public sector employment may result in an increase in gender earnings inequality.