Controlling the public wage bill in Portugal: the case of university professors
AbstractPublic wages are a large share of the public budget in Portugal and, therefore, hiring freezes are a central feature of the efforts to control the public deficit. The system of public career advancement, however, may lead to increases in the wage bill even in the presence of hiring freezes. We estimate this wage drift effect in the case of university professors. We use a logit analysis with 1999 census data to identify the determinants of career advancement, to estimate the employment distribution in previous years and to obtain the corresponding wage bill. We estimate that the annual wage drift is 2.6%, a figure well above the gross domestic product growth rate and, therefore, we conclude that hiring freezes may be far from enough to stop the expansion of the public wage bill.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Applied Economics Letters.
Volume (Year): 15 (2008)
Issue (Month): 13 ()
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Other versions of this item:
- Alfredo M. Pereira & Rui Manuel Pereira, 2006. "Controlling the Public Wage Bill in Portugal: The Case of University Professors," Working Papers 36, Department of Economics, College of William and Mary, revised 11 Aug 2006.
- H60 - Public Economics - - National Budget, Deficit, and Debt - - - General
- J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
- J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
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- McCue, Kristin, 1996. "Promotions and Wage Growth," Journal of Labor Economics, University of Chicago Press, vol. 14(2), pages 175-209, April.
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