Arbeitspapier
Employment in the Public Sector
This paper presents a model of wage-employment determination in private and public sectors, which allows us to analyze the effects of different institutional arrangements on labor market equilibria. In particular, it focuses on how different degrees of coordination in decision processes affect hiring and wage setting outcomes. Cooperation in unions' behavior results in wage increases and employment reduction in the private sector, whereas it induces wage moderation and employment expansion in the public sector. Not surprisingly, if public decision units do not fully internalize the aggregate budget constraint in their hiring processes, the public sector wage bill and the level of taxation increase, thus enhancing the crowding out effect on private employment. Such effect appears to be stronger in the presence of encompassing union behavior. An empirical analysis performed on a sample of OECD countries in the period 1960-2000 seems to support the main predictions of the model.
- Language
-
Englisch
- Bibliographic citation
-
Series: CESifo Working Paper ; No. 1085
- Classification
-
Wirtschaft
- Subject
-
public employment
wage bargaining
decentralization
- Event
-
Geistige Schöpfung
- (who)
-
Forni, Lorenzo
Giordano, Raffaela
- Event
-
Veröffentlichung
- (who)
-
Center for Economic Studies and ifo Institute (CESifo)
- (where)
-
Munich
- (when)
-
2003
- Handle
- Last update
- 10.03.2025, 11:41 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Forni, Lorenzo
- Giordano, Raffaela
- Center for Economic Studies and ifo Institute (CESifo)
Time of origin
- 2003
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