Staff, Functions, and Staff Costs at Central Banks: An International Comparison with a Labor-demand Model
AbstractDuring the period 2000-2004 central banks sustained a generalized reduction in their staff, which was accompanied, in most cases, with significant increases in staff costs. This could obey to an enhanced interest of central banks in focusing on their core functions. In fact, central banks have changed the ways they perform their operative functions (e.g. currency operations, payment systems operation, printing notes, etc.) through different strategies aimed at gathering the participation of third parties. These strategies differ according to the relationship that central banks have with the financial sector and the government, as well as to their historical tradition and modernization trend. To explain the effect of these changes on the staff, we estimated a short-term labor demand function for 66 central banks using a panel data model with random effects. Results indicate that central banks’ labor demand is strongly determined by the country’s population, economic development level and changes in operative functions, as well as by staff costs. In addition, we found a low employment-wage elasticity suggesting the presence of a flexible budgetary constrain in central banks.
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Bibliographic InfoPaper provided by Banco de la Republica de Colombia in its series Borradores de Economia with number 419.
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Central Banking; Labor Demand; Modernization; Functions; Staff Costs; Panel Data; Random Effects. Classification JEL: E50; J23; J30; C33;
Other versions of this item:
- Jorge Galán Camacho & Miguel Sarmiento, 2006. "Staff, Functions, and Staff Costs at Central Banks: An International Comparison with a Labor-demand Model," BORRADORES DE ECONOMIA 003524, BANCO DE LA REPÚBLICA.
- E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
- J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-12-04 (All new papers)
- NEP-LAB-2006-12-04 (Labour Economics)
- NEP-MAC-2006-12-04 (Macroeconomics)
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