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Private and Government Employment in the OECD: Productivities and Wages

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  • Georgios Karras

Abstract

type="main" xml:lang="en"> This paper estimates the productivity of private and government employment for a panel of 23 OECD economies over the 1961–1992 period, and investigates their relation to the government/private wage ratio. The paper finds that (i) the elasticities of output with respect to private and government employment are statistically significantly different from each other; (ii) the marginal products of private and government employment are not statistically significantly different, which suggests that government employment is neither over- nor under-provided, and that shifting employment from one sector to the other is not likely to produce substantial output gains; and (iii) in most of the countries examined, government workers are overpaid in the sense that the government/private wage ratio exceeds the corresponding ratio of marginal products. (J.E.L. E24, E62).

Suggested Citation

  • Georgios Karras, 2000. "Private and Government Employment in the OECD: Productivities and Wages," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 29(2), pages 267-279, July.
    • Handle: RePEc:bla:ecnote:v:29:y:2000:i:2:p:267-279
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    File URL: http://hdl.handle.net/10.1111/1468-0300.00033
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    1. repec:hal:spmain:info:hdl:2441/8846 is not listed on IDEAS
    2. Yann Algan & Pierre Cahuc & André Zylberberg, 2002. "Public employment and labour market performance [‘On the benefits from rigid labour markets: Norms, market failures and social insurances’]," Economic Policy, CEPR;CES;MSH, vol. 17(34), pages 7-66.
    3. Yann Algan & Pierre Cahuc & André Zylberberg, 2002. "Public employment and labour market performance [‘On the benefits from rigid labour markets: Norms, market failures and social insurances’]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 17(34), pages 7-66.

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