Does Public-Sector Employment Fully Crowd Out Private-Sector Employment?
We 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.
|Date of creation:||12 Jun 2013|
|Date of revision:|
|Contact details of provider:|| Postal: International Monetary Fund, Washington, DC USA|
Phone: (202) 623-7000
Fax: (202) 623-4661
Web page: http://www.imf.org/external/pubind.htm
More information through EDIRC
|Order Information:||Web: http://www.imf.org/external/pubs/pubs/ord_info.htm|
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.:
- Giulia Faggio & Henry G. Overman, 2012.
"The Effect of Public Sector Employment on Local Labour Markets,"
SERC Discussion Papers
0111, Spatial Economics Research Centre, LSE.
- Faggio, Giulia & Overman, Henry, 2014. "The effect of public sector employment on local labour markets," Journal of Urban Economics, Elsevier, vol. 79(C), pages 91-107.
- Richard Freeman, 2005.
"Labour market institutions without blinders: The debate over flexibility and labour market performance,"
International Economic Journal,
Taylor & Francis Journals, vol. 19(2), pages 129-145.
- Richard B. Freeman, 2005. "Labour Market Institutions Without Blinders: The Debate over Flexibility and Labour Market Performance," NBER Working Papers 11286, National Bureau of Economic Research, Inc.
- Zenon Kontolemis & Dimitri G Demekas, 1999.
"Government Employment and Wages and Labor Market Performance,"
IMF Working Papers
99/55, International Monetary Fund.
- Demekas, Dimitri G & Kontolemis, Zenon G, 2000. " Government Employment and Wages and Labour Market Performance," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 62(3), pages 391-415, July.
- Malley, Jim & Moutos, Thomas, 1996.
" Does Government Employment "Crowd-Out" Private Employment? Evidence from Sweden,"
Scandinavian Journal of Economics,
Wiley Blackwell, vol. 98(2), pages 289-302, June.
- Jim Malley & Thomas Moutos, 1992. "Does Government Employment "Crowd-Out" Private Employment?: Evidence from Sweden," Working Papers Series 92/16, University of Stirling, Division of Economics.
- Aschauer, David Alan, 1989.
"Does public capital crowd out private capital?,"
Journal of Monetary Economics,
Elsevier, vol. 24(2), pages 171-188, September.
- Horst Feldmann, 2010. "Government size and unemployment in developing countries," Applied Economics Letters, Taylor & Francis Journals, vol. 17(3), pages 289-292, February.
- Vulentin, Guillermo & Vegh, Carlos A & Frankel, Jeffrey A., 2012.
"On Graduation from Fiscal Procyclicality,"
8694931, Harvard Kennedy School of Government.
- Jeffrey A. Frankel & Carlos A. Végh & Guillermo Vuletin, 2011. "On Graduation from Fiscal Procyclicality," NBER Working Papers 17619, National Bureau of Economic Research, Inc.
- Frankel, Jeffrey A. & Vegh, Carlos A. & Vuletin, Guillermo, 2012. "On Graduation from Fiscal Procyclicality," Working Paper Series rwp12-011, Harvard University, John F. Kennedy School of Government.
- Raphael Espinoza, 2012. "Government Spending, Subsidies and Economic Efficiency in the GCC," OxCarre Working Papers 095, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
- Filipe R. Campante & Davin Chor, 2012. "Why Was the Arab World Poised for Revolution? Schooling, Economic Opportunities, and the Arab Spring," Journal of Economic Perspectives, American Economic Association, vol. 26(2), pages 167-88, Spring.
- Horst Feldmann, 2006. "Government Size and Unemployment: Evidence from Industrial Countries," Public Choice, Springer, vol. 127(3), pages 443-459, June.
- Ana Lamo & Javier J. Pérez & Ludger Schuknecht, 2012. "Public or Private Sector Wage Leadership? An International Perspective," Scandinavian Journal of Economics, Wiley Blackwell, vol. 114(1), pages 228-244, 03.
- Lorenzo E Bernal-Verdugo & Davide Furceri & Dominique Guillaume, 2012.
"Labor Market Flexibility and Unemployment: New Empirical Evidence of Static and Dynamic Effects,"
Comparative Economic Studies,
Palgrave Macmillan, vol. 54(2), pages 251-273, June.
- Lorenzo E. Bernal-Verdugo & Davide Furceri & Dominique M. Guillaume, 2012. "Labor Market Flexibility and Unemployment; New Empirical Evidence of Static and Dynamic Effects," IMF Working Papers 12/64, International Monetary Fund.
When requesting a correction, please mention this item's handle: RePEc:imf:imfwpa:13/146. 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: (Jim Beardow)or (Hassan Zaidi)
If references are entirely missing, you can add them using this form.