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Public-sector Employment in an Equilibrium Search and Matching Model

Author

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  • James Albrecht
  • Monica Robayo-Abril
  • Susan Vroman

Abstract

We extend the Diamond–Mortensen–Pissarides model of equilibrium unemployment to incorporate public-sector employment. We calibrate our model to Colombian data and analyse the effects of public-sector wage and employment policy on the unemployment rate, on the division of employment between the private and public sectors, and on the distributions of wages in the two sectors.

Suggested Citation

  • James Albrecht & Monica Robayo-Abril & Susan Vroman, 2019. "Public-sector Employment in an Equilibrium Search and Matching Model," The Economic Journal, Royal Economic Society, vol. 129(617), pages 35-61.
    • Handle: RePEc:oup:econjl:v:129:y:2019:i:617:p:35-61.
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    File URL: http://hdl.handle.net/10.1111/ecoj.12533
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    JEL classification:

    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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