Public jobs creation and unemployment dynamics

Céline Choulet ()
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Céline Choulet: CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique

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Abstract: This paper raises the question of the dynamic effects of public spending in jobs on labor market performance. We use a dynamic matching model and study how public jobs creation affects endogenous workers' decisions to move on the labor market and private-sector firms' job creation and destruction decisions. We obtain that it exerts an attracting effect and a fiscal effect on the labor market that make the unemployment rate and job flows overshoot. As an empirical illustration, we estimate a SVAR model that focuses on the consequences of public job creations on unemployment, wages and job flows dynamics. We confirm our intuition: public employment has a significant ambiguous effect on private wages.

Keywords: unemployment dynamics.; public sector labor market; emploi public; dynamique du chômage. (search for similar items in EconPapers)
Date: 2006-03
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00113357
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Citations: View citations in EconPapers (3)

Published in 2006

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00113357

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