The effects of public sector employment on the economy

Vincenzo Caponi and Simone Nobili

IZA World of Labor, 2024, No 332v2, 332v2

Abstract: Public sector jobs are established by governments to directly provide goods and services. Governments, however, may also choose to regulate the size of the public sector in order to stabilize targeted national employment levels. However, economic research suggests that these effects are uncertain and critically depend on how public wages are determined. Rigid public sector wages lead to perverse effects on private employment, while flexible public wages lead to a stabilizing effect. Public employment also has important productivity and redistributive effect

Keywords: public sector employment; public sector wages; unemployment (search for similar items in EconPapers)
JEL-codes: E23 J45 (search for similar items in EconPapers)
Date: 2024
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Journal Article: The effects of public sector employment on the economy (2017)
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