Arbeitspapier
Is there a Laffer curve between aggregate output and public sector employment?
This paper develops a model of the relationship between public sector employment, total output and aggregate real demand in market prices, where public employment has a positive productivity effect on private output. Public employment crowds out private employment and output because its increase induces higher wages and taxes. The valuation of government output is also taken into account. While public employment affects total output and aggregate real demand in an a priori ambiguous way, numerical simulations suggest that the relationship may be nonlinear; positive, when public sector is “small” and negative when it is “large”. Using the annual data from 22 OECD countries over the period 1960–1996 and estimating and testing for threshold models and more commonly used specifications with multiplicative interaction terms give support to this nonlinearity hypothesis between public employment and private sector output.
- Sprache
-
Englisch
- Erschienen in
-
Series: ETLA Discussion Papers ; No. 737
- Klassifikation
-
Wirtschaft
Structure, Scope, and Performance of Government
Public Sector Labor Markets
Labor Force and Employment, Size, and Structure
- Thema
-
public sector
Laffer curve
threshold models
julkisen sektorin koko
Laffer-käyrä
kynnysmallit
Laffer-Kurve
Öffentlicher Sektor
Öffentlicher Dienst
Gesamtwirtschaftliche Produktion
OECD-Staaten
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Koskela, Erkki
Virén, Matti
- Ereignis
-
Veröffentlichung
- (wer)
-
The Research Institute of the Finnish Economy (ETLA)
- (wo)
-
Helsinki
- (wann)
-
2000
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:42 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Koskela, Erkki
- Virén, Matti
- The Research Institute of the Finnish Economy (ETLA)
Entstanden
- 2000
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