Does Public-Sector Employment Fully Crowd Out Private-Sector Employment?
AbstractWe quantify the extent to which public-sector employment crowds out private-sector employment using specially assembled datasets for a large cross-section of developing and advanced countries, and discuss the implications for countries in the Middle East, North Africa, Caucasus and Central Asia. These countries simultaneously display high unemployment rates, low private-sector employment rates and high proportions of government-sector employment. Regressions of either private-sector employment rates or unemployment rates on two measures of public-sector employment point to full crowding out. This means that high rates of public employment, which incur substantial fiscal costs, have a large negative impact on private employment rates and do not reduce overall unemployment rates.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 13/146.
Date of creation: 12 Jun 2013
Date of revision:
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Postal: International Monetary Fund, Washington, DC USA
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Other versions of this item:
- Alberto Behar & Junghwan Mok, 2013. "Does Public-Sector Employment Fully Crowd Out Private-Sector Employment?," CSAE Working Paper Series 2013-20, Centre for the Study of African Economies, University of Oxford.
- J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
- J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
- H59 - Public Economics - - National Government Expenditures and Related Policies - - - Other
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-09-26 (All new papers)
- NEP-ARA-2013-09-26 (MENA - Middle East & North Africa)
- NEP-LAB-2013-09-26 (Labour Economics)
- NEP-PBE-2013-09-26 (Public Economics)
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