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Public employment and labor market performances

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  • Yann Algan

    () (FRJ - Fédération de recherche Jourdan - ENPC - École des Ponts ParisTech - CEPREMAP - Centre pour la recherche économique et ses applications - EHESS - École des hautes études en sciences sociales - INRA - Institut National de la Recherche Agronomique - ENS Paris - École normale supérieure - Paris)

  • Pierre Cahuc

    (CREST - Centre de Recherche en Économie et Statistique - ENSAE ParisTech - École Nationale de la Statistique et de l'Administration Économique)

  • André Zylberberg

    () (EUREQUA - Equipe Universitaire de Recherche en Economie Quantitative - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper deals with the consequence of public employment on labor market performances in 17 OECD countries over the period 1960-2000. It is argued that public employment had an important crowding out e¤ect on the private sector and increased the unemployment rate over this period. More precisely, empirical evidence suggests that the creation of one public job destroyed about 1.5 private job, sightly decreased participation to the labor market and eventually increased the number of unemployed workers by 0:3: Theoretical considerations and empirical evidence also suggest that the crowding out effect of public jobs on private jobs is more important in countries in which public production ishighly substitutable to private activities and in which the public sector provides high rents.

Suggested Citation

  • Yann Algan & Pierre Cahuc & André Zylberberg, 2002. "Public employment and labor market performances," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00256207, HAL.
  • Handle: RePEc:hal:cesptp:halshs-00256207
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00256207
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    References listed on IDEAS

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    Keywords

    Employment; public employment; unemployment;

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