Public employment and labor market performances

Yann Algan (), Pierre Cahuc and Andre Zylberberg

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

Abstract: This paper deals with the consequence of public employment on labor market performances in 17 OECD countries over the period 1960-2000. It is argued that public employment had an important crowding out e¤ect on the private sector and increased the unemployment rate over this period. More precisely, empirical evidence suggests that the creation of one public job destroyed about 1.5 private job, sightly decreased participation to the labor market and eventually increased the number of unemployed workers by 0:3: Theoretical considerations and empirical evidence also suggest that the crowding out effect of public jobs on private jobs is more important in countries in which public production ishighly substitutable to private activities and in which the public sector provides high rents.

Keywords: Employment; public employment; unemployment (search for similar items in EconPapers)
Date: 2002-04
Note: View the original document on HAL open archive server: http://halshs.archives-ouvertes.fr/halshs-00256207/en/
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Published, Economic Policy, 2002, 1-65

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Journal Article: Public employment and labour market performance (2002)
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Persistent link: http://EconPapers.repec.org/RePEc:hal:cesptp:halshs-00256207_v1

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