Public Employment and Labor Market Performances
We explore the consequences of public employment for labour market performance. Theory suggests that public employment may not only crowd out private employment, but also increase overall unemployment if, by offering attractive working conditions, it draws additional individuals into the labour force. Empirical evidence from a sample of OECD countries in the 1960–2000 period suggests that, on average, creation of 100 public jobs may have eliminated about 150 private sector jobs, slightly decreased labour market participation, and increased by about 33 the number of unemployed workers. Theoretical considerations and empirical evidence, however, suggest that the crowding out effect of public jobs on private jobs is only significant in countries where public production is highly substitutable to private activities and the public sector offers more attractive wages and/or other benefits than the private labour market.
|Date of creation:||Apr 2002|
|Date of revision:|
|Publication status:||Published in Journal of Economic Policy Reform, 2002, vol. 17, pp.1-65|
|Contact details of provider:|| Web page: http://www.sciencespo.fr/|
More information through EDIRC
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.:
- Stephen Nickell, 1997. "Unemployment and Labor Market Rigidities: Europe versus North America," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 55-74, Summer.
- Tirole, J., 1993.
"The Internal Organization of Government,"
93-11, Massachusetts Institute of Technology (MIT), Department of Economics.
- Alberto Alesina & Nouriel Roubini & Gerald D. Cohen, 1997. "Political Cycles and the Macroeconomy," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262510944, June.
- Albert Ma, Ching-to & Weiss, Andrew M., 1993.
"A signaling theory of unemployment,"
European Economic Review,
Elsevier, vol. 37(1), pages 135-157, January.
- Holmlund, Bertil, 1993.
"Wage setting in private and public sectors in a model with endogenous government behavior,"
European Journal of Political Economy,
Elsevier, vol. 9(2), pages 149-162, May.
- Holmlund, B., 1991. "Wage Setting in Private and Public Sectors in a Model with Endogenous Government Behavior," Papers 1991i, Uppsala - Working Paper Series.
- Michèle Belot & Jan C. van Ours, 2004.
"Does the recent success of some OECD countries in lowering their unemployment rates lie in the clever design of their labor market reforms?,"
Oxford Economic Papers,
Oxford University Press, vol. 56(4), pages 621-642, October.
- Belot, Michèle & van Ours, Jan C., 2000. "Does the Recent Success of Some OECD Countries in Lowering their Unemployment Rates Lie in the Clever Design of their Labour Market Reform?," IZA Discussion Papers 147, Institute for the Study of Labor (IZA).
- Belot, Michèle & van Ours, Jan C, 2000. "Does the Recent Success of some OECD Countries in Lowering their Unemployment Rates lie in the Clever Design of their Labour Market Reforms?," CEPR Discussion Papers 2492, C.E.P.R. Discussion Papers.
- Belot, M.V.K. & van Ours, J.C., 2000. "Does the Recent Success of some OECD Countries in Lowering their Unemployment Rates lie in the Clever Design of their Labour Market Reforms?," Discussion Paper 2000-40, Tilburg University, Center for Economic Research.
- Richard Layard & Stephen Nickell, 1992.
"Unemployment in the OECD Countries,"
CEP Discussion Papers
dp0081, Centre for Economic Performance, LSE.
- Jim Malley & Thomas Moutos, .
"Government Employment and Unemployment: With One Hand Giveth, the Other Taketh,"
ICMM Discussion Papers
47, Department of Economics University of Strathclyde.
- Jim Malley & Thomas Moutos, . "Government Employment and Unemployment: With One Hand Giveth, The Other Taketh," Working Papers 9709, Business School - Economics, University of Glasgow, revised May 1998.
- Francesco Daveri & Guido Tabellini, .
"Unemployment, Growth and Taxation in Industrial Countries,"
122, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
- Francesco Daveri & Guido Tabellini, 2000. "Unemployment, growth and taxation in industrial countries," Economic Policy, CEPR;CES;MSH, vol. 15(30), pages 47-104, 04.
- Daveri, Francesco & Tabellini, Guido, 1997. "Unemployment, Growth and Taxation in Industrial Countries," CEPR Discussion Papers 1681, C.E.P.R. Discussion Papers.
- Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April.
- Holmlund, Bertil, 1997. "Macroeconomic Implications of Cash Limits in the Public Sector," Economica, London School of Economics and Political Science, vol. 64(253), pages 49-62, February.
- Stephan Danninger & Alberto Alesina & Massimo V. Rostagno, 1999.
"Redistribution Through Public Employment; The Case of Italy,"
IMF Working Papers
99/177, International Monetary Fund.
- Albert Alesina & Stephan Danninger & Massimo Rostagno, 2001. "Redistribution Through Public Employment: The Case of Italy," IMF Staff Papers, Palgrave Macmillan, vol. 48(3), pages 2.
- Alberto Alesina & Stephan Danninger & Massimo Rostagno, 1999. "Redistribution Through Public Employment: The Case of Italy," NBER Working Papers 7387, National Bureau of Economic Research, Inc.
- Georgios Karras, 2000. "Private and Government Employment in the OECD: Productivities and Wages," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 29(2), pages 267-279, 07.
- Richard B. Freeman, 2000. "Single Peaked Vs. Diversified Capitalism: The Relation Between Economic Institutions and Outcomes," NBER Working Papers 7556, National Bureau of Economic Research, Inc.
- Oliver Hart & Andrei Shleifer & Robert W. Vishny, 1996.
"The Proper Scope of Government: Theory and an Application to Prisons,"
NBER Working Papers
5744, National Bureau of Economic Research, Inc.
- Hart, Oliver & Shleifer, Andrei & Vishny, Robert W, 1997. "The Proper Scope of Government: Theory and an Application to Prisons," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1127-61, November.
- Oliver Hart & Andrei Shleifer & Robert Vishny, 1996. "The Proper Scope of Government: Theory and an Application to Prisons," Harvard Institute of Economic Research Working Papers 1778, Harvard - Institute of Economic Research.
- Sherwin Rosen, 1997.
"Public Employment, Taxes, and the Welfare State in Sweden,"
in: The Welfare State in Transition: Reforming the Swedish Model, pages 79-108
National Bureau of Economic Research, Inc.
- Sherwin Rosen, 1995. "Public Employment, Taxes and the Welfare State in Sweden," NBER Working Papers 5003, National Bureau of Economic Research, Inc.
- Sherwin Rosen, 1995. "Public Employment, Taxes and the Welfare State in Sweden," University of Chicago - George G. Stigler Center for Study of Economy and State 106, Chicago - Center for Study of Economy and State.
- Ronald G. Ehrenberg & Joshua L. Schwarz, 1983.
"Public Sector Labor Markets,"
NBER Working Papers
1179, National Bureau of Economic Research, Inc.
- McDonald, Ian M & Solow, Robert M, 1981. "Wage Bargaining and Employment," American Economic Review, American Economic Association, vol. 71(5), pages 896-908, December.
- 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.
- Zenon Kontolemis G. & Dimitri G. Demekas, 1999. "Government Employment and Wages and Labor Market Performance," IMF Working Papers 99/55, International Monetary Fund.
- Nickell, S., 1991. "Wages, Unemployment and Population Change," Economics Series Working Papers 99122, University of Oxford, Department of Economics.
- Holmlund, Bertil & Linden, Johan, 1993.
"Job matching, temporary public employment, and equilibrium unemployment,"
Journal of Public Economics,
Elsevier, vol. 51(3), pages 329-343, July.
- Holmlund, B. & Linden, J., 1991. "Job Matching, Temporary Public Employment, and Equilibrium Unemployment," Papers 1991l, Uppsala - Working Paper Series.
When requesting a correction, please mention this item's handle: RePEc:spo:wpmain:info:hdl:2441/8846. 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: (Spire @ Sciences Po Library)
If references are entirely missing, you can add them using this form.