Advanced Search
MyIDEAS: Login to save this paper or follow this series

How public sector pay and employment affect labor markets : research issues

Contents:

Author Info

  • Stevenson, Gail
Registered author(s):

    Abstract

    Structurally, the public sector has a more important economic role to play in developing countries than in industrial countries, particularly in how it affects labor markets. Evidence from many developing countries shows that public sector pay, employment, and performance are hurting the labor markets'ability to allocate workers among sectors and skill requirements. In many countries, the civil service and the public sector wage bill have grown to unsustainably high levels. The public sector is so big that interventions in the sector - with or without spillover effects into the nonpublic sector - make it more difficult for wages and employment to respond to shifts in demand and supply. Nonwage benefits are seldom related to productivity, so they can be particularly distorting. At the same time, a long-term drop in real civil service wages and the compression of wage ranges have caused critical shortages of managerial and technical workers in the civil service. The resulting skill imbalances in the rest of the domestic economy reduce international competitiveness in some countries. Policy reform has focused on the reform of large, inefficient public sectors because of their cumulative negative effects on economic growth and competitiveness. Policies to adjust relative prices from nontradables toward tradables have led to some movement of employment out of the public sector, but significant rigidities remain. Workers are attracted to the public sector because of complex economic and social incentives that are difficult to change - and the relationship between public sector interventions and the underlying political and economic forces is an important area for research. The slow progress in restructuring the public sector in many countries highlights the needto address more forcefully and more subtly how public sector policies affect the labor market.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www-wds.worldbank.org/servlet/WDSContentServer/WDSP/IB/1992/08/01/000009265_3961003060855/Rendered/PDF/multi_page.pdf
    Download Restriction: no

    Bibliographic Info

    Paper provided by The World Bank in its series Policy Research Working Paper Series with number 944.

    as in new window
    Length:
    Date of creation: 31 Aug 1992
    Date of revision:
    Handle: RePEc:wbk:wbrwps:944

    Contact details of provider:
    Postal: 1818 H Street, N.W., Washington, DC 20433
    Phone: (202) 477-1234
    Email:
    Web page: http://www.worldbank.org/
    More information through EDIRC

    Related research

    Keywords: Environmental Economics&Policies; Banks&Banking Reform; Health Monitoring&Evaluation; Public Sector Economics&Finance; Municipal Financial Management;

    References

    References listed on IDEAS
    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.:
    as in new window
    1. Chew, David C. E., 1990. "Internal adjustments to falling civil service salaries: Insights from Uganda," World Development, Elsevier, vol. 18(7), pages 1003-1014, July.
    2. Riveros, Luis A., 1992. "Labor costs and manufactured exports in developing countries: An econometric analysis," World Development, Elsevier, vol. 20(7), pages 991-1008, July.
    3. Lindauer, David L & Meesook, Oey Astra & Suebsaeng, Parita, 1988. "Government Wage Policy in Africa: Some Findings and Policy Issues," World Bank Research Observer, World Bank Group, vol. 3(1), pages 1-25, January.
    4. Nunberg, Barbara & Nellis, John, 1990. "Civil service reform and the World Bank," Policy Research Working Paper Series 422, The World Bank.
    5. Lindauer, David L., 1991. "Parastatal pay policy in Africa," World Development, Elsevier, vol. 19(7), pages 831-838, July.
    6. Easterly, William & Schmidt-Hebbel, Klaus, 1991. "The macroeconomics of public sector deficits : a synthesis," Policy Research Working Paper Series 775, The World Bank.
    7. Levy, Victor & Newman, John L, 1989. "Wage Rigidity: Micro and Macro Evidence on Labor Market Adjustment in the Modern Sector," World Bank Economic Review, World Bank Group, vol. 3(1), pages 97-117, January.
    8. Lopez, Ramon E. & Riveros, Luis A., 1989. "Macroeconomic adjustment and the labor market in four Latin American countries," Policy Research Working Paper Series 335, The World Bank.
    9. Horton, Susan & Kanbur, Ravi & Mazumdar, Dipak, 1991. "Labor markets in an era of adjustment : an overview," Policy Research Working Paper Series 694, The World Bank.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Lassibille, Gerard, 1998. "Wage Gaps Between the Public and Private Sectors in Spain," Economics of Education Review, Elsevier, vol. 17(1), pages 83-92, February.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:944. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.