Does Public-Sector Employment Fully Crowd Out Private-Sector Employment?
Electronic Access:
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Summary:
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.
Series:
Working Paper No. 2013/146
Subject:
Employment Employment rate Government debt management Labor Public employment Public financial management (PFM) Unemployment
English
Publication Date:
June 12, 2013
ISBN/ISSN:
9781484329412/1018-5941
Stock No:
WPIEA2013146
Pages:
38
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