Rightsizing Brazil’s Public-Sector Wage Bill

Izabela Karpowicz and Mauricio Soto ()

No 2018/225, IMF Working Papers from International Monetary Fund

Abstract: Brazil’s public-sector wage bill is comparatively high. It grows inertially and competes with other spending. Rightsizing the wage bill could stimulate administrative efficiency and bring more equity into a system where public employees earn more than private in comparable professions. Most importantly, however, a reform is necessary to comply with the Federal government expenditure ceiling and the subnational fiscal responsibility rules. A reform should thus encompass all government levels, and all careers, and should aim to achieve a real decrease in salaries and lower employment. In the medium term, a review of the compensation structure should rationalize the multitude if wage grids, merge allowances into the base wage, and align public sector compensation to private wages in low-skilled professions.

Keywords: WP; pay; wage bill; government; bill growth; bill; private sector; employee compensation; public spending; fiscal rules; bill statistics; bill policy; bill rule; bill management; log-earnings specification; bill adjustment; Wages; Employment; Wage adjustments; Public sector wages; Government wage bill; Europe (search for similar items in EconPapers)
Pages: 24
Date: 2018-10-08
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Citations: View citations in EconPapers (1)

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