Fiscal Transfers, Public Sector Wage Premium and the Effects on Private Wages
AbstractWe examine the relationship between federal transfers, the existence of a wage premium for the public sector and its effects on private wages in Argentina. The empirical analysis is based on the theoretical presumption that federal fiscal transfers to the different regions are being used to finance more public employment therefore discouraging private activity. The results suggest that the public sector pays a wage premium relative to the private sector. This premium is increasing in the level of per capita federal transfers. There is no evidence of an overall positive effect on wages in the private manufacturing sector. However, we find a significant positive relationship between federal transfers and wages paid to workers with less formal education; for jobs requiring a technical or profesional qualification the relationship is negative. These results broadly support the hypothesis that the private sector faces harder competition in the labour market in provinces which receive larger transfers from the central government.
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Bibliographic InfoArticle provided by Universidad Nacional de Córdoba, Facultad de Ciencias Económicas, Instituto de Economía y Finanzas in its journal Revista de Economía y Estadística.
Volume (Year): XLVII (2009)
Issue (Month): 2 (July)
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Inter-governmental Transfers; Labour Markets; Wage Premium; Fiscal Policy;
Find related papers by JEL classification:
- H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
- R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Alberto Alesina & Silvia Ardagna & Roberto Perotti & Fabio Schiantarelli, 1999.
"Fiscal Policy, Profits, and Investment,"
NBER Working Papers
7207, National Bureau of Economic Research, Inc.
- Schiantarelli, Fabio & Perotti, Roberto & Ardagna, Silvia & Alesina, Alberto, 2002. "Fiscal Policy, Profits, and Investment," Scholarly Articles 4685103, Harvard University Department of Economics.
- 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.
- Alberto Alesina & Silvia Ardagna & Roberto Perotti & Fabio Schiantarelli, 2000. "Fiscal Policy, Profits, and Investment," Boston College Working Papers in Economics 504, Boston College Department of Economics.
- Ardagna, Silvia & Alesina, Alberto & Perotti, Roberto & Schiantarelli, Fabio, 2002. "Fiscal Policy, Profits, and Investment," Scholarly Articles 3353756, Harvard University Department of Economics.
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