Arbeitspapier

Does public sector outsourcing decrease public employment? Empirical evidence from OECD countries

I examine the extent to which public sector outsourcing relates to public employment in OECD countries. I use new panel data on public sector outsourcing. The sample includes 26 countries over the period 2009-2015. Contrary to common expectations, the results do not suggest that public sector outsourcing expenditure was negatively related to public employment in the full sample. The relation between public sector outsourcing and public employment, however, does vary across countries. If anything, the growth in public sector outsourcing in period t-1 was positively correlated with the growth in public employment in period t. When public sector outsourcing gives rise to regrouping public employees but not reducing public employment, outsourcing may even increase inefficiencies in the public sector.

Language
Englisch

Bibliographic citation
Series: ifo Working Paper ; No. 267

Classification
Wirtschaft
Comparison of Public and Private Enterprises and Nonprofit Institutions; Privatization; Contracting Out
Public Sector Labor Markets
Capitalist Systems: Political Economy
Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models
Subject
Public employment
public sector outsourcing
OECD countries
economic policymaking
panel data

Event
Geistige Schöpfung
(who)
Potrafke, Niklas
Event
Veröffentlichung
(who)
ifo Institute - Leibniz Institute for Economic Research at the University of Munich
(where)
Munich
(when)
2018

Handle
Last update
10.03.2025, 11:42 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Potrafke, Niklas
  • ifo Institute - Leibniz Institute for Economic Research at the University of Munich

Time of origin

  • 2018

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