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Heterogeneity and the Public Sector Wage Policy

Pedro Gomes ()

No 11091, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: A model with search and matching frictions and heterogeneous workers was established to evaluate a reform of the public sector wage policy in steady-state. The model was calibrated to the UK economy based on Labour Force Survey data. A review of the pay received by all public sector workers to align the distribution of wages with the private sector reduces steady-state unemployment by 1.4 percentage points.

Keywords: public sector wage premium; public sector wages; public sector employment; unemployment; skilled workers; worker heterogeneity (search for similar items in EconPapers)
JEL-codes: E24 E62 J45 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge, nep-lma, nep-mac and nep-pbe
Date: 2017-10
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Published in: International Economic Review, 2018, 59 (3), 1469 -1489

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Journal Article: HETEROGENEITY AND THE PUBLIC SECTOR WAGE POLICY (2018) Downloads
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