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Wage Policy in the Public Sector and Income Distribution

Eytan Sheshinski ()

MPRA Paper from University Library of Munich, Germany

Abstract: This paper examines the direct and indirect e�ects of a government's wage policy in the public sector on the overall income distribution in the economy. By direct e�ects we mean the wage di�erentials in the public sector. Indirect e�ects refer to the secondary e�ects of the government's policy through changes in the occupational structure. This analysis is based on a simple model suggested by Tinbergen (1951) and Roy (1951), followed by Houthakker (1976). In the numerical calculations, the model yields realistic conclusions which underline the importance of government wage policy.

Keywords: income distribution; wage policy; public and private sector; Lorentz curve (search for similar items in EconPapers)
JEL-codes: H0 (search for similar items in EconPapers)
Date: 1982
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