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Does Government Employment "Crowd-Out" Private Employment? Evidence from Sweden

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Author Info
Malley, Jim
Moutos, Thomas

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Abstract

It is argued that increases in government spending that take the form of increases in government employment can have a negative impact on private-sector employment by increasing real wages. In fact, once the supply reducing effects of higher taxes needed to finance the increase in government employment are taken into account, the fall in private employment can be so large as to cause decreases in aggregate employment. The authors demonstrate this with quarterly Swedish data for the period 1964-90. Copyright 1996 by The editors of the Scandinavian Journal of Economics.

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Publisher Info
Article provided by Blackwell Publishing in its journal Scandinavian Journal of Economics.

Volume (Year): 98 (1996)
Issue (Month): 2 (June)
Pages: 289-302
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Handle: RePEc:bla:scandj:v:98:y:1996:i:2:p:289-302

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  1. Andrew Henley, Dennis Thomas, 2001. "Public Service Employment and the Public-- Private Wage Differential in British Regions," Regional Studies, Taylor and Francis Journals, vol. 35(3), pages 229-240, May. [Downloadable!] (restricted)
  2. Jim Malley & Thomas Moutos, . "Government Employment and Unemployment: With One Hand Giveth, The Other Taketh," Working Papers 9709, Department of Economics, University of Glasgow, revised May 1998. [Downloadable!]
    Other versions:
  3. Alesina, Alberto F & Ardagna, Silvia & Perotti, Roberto & Schiantarelli, Fabio, 1999. "Fiscal Policy, Profits and Investment," CEPR Discussion Papers 2250, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  4. Horst Feldmann, 2006. "Government Size and Unemployment: Evidence from Industrial Countries," Public Choice, Springer, vol. 127(3), pages 443-459, June. [Downloadable!] (restricted)
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This page was last updated on 2009-11-22.

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