IMF Working Papers

Public Employment and Compensation Reform During Times of Fiscal Consolidation

By Lorenzo Forni, Natalija Novta

October 23, 2014

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Lorenzo Forni, and Natalija Novta. Public Employment and Compensation Reform During Times of Fiscal Consolidation, (USA: International Monetary Fund, 2014) accessed September 18, 2024
Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper compiles and compares recent and past measures introduced to contain the public wage bill in a number of emerging and advanced economies to assess their effectiveness in bringing down expenditure in a sustained way. In the aftermath of the Great Recession a number of countries have approved measures on the wage bill as part of fiscal consolidation efforts. These recent episodes are compared to past cases implemented in advanced economies over the period 1979–2009. Findings suggest that public wage bill consolidation episodes pre and post 2009 are similar in many respects. Moreover, typically countries that were able to achieve more sustained reductions in the wage bill have implemented to larger extent structural measures, and/or these measures were accompanied with substantial social dialogue and consensus.

Subject: Expenditure, Government wage bill, Labor, Labor share, Public employment, Wage adjustments, Wages

Keywords: Bill, Bill consolidation, Bill measure, Bill reduction, Consolidation episode, Employment, Europe, Fiscal consolidation, Global, Government wage bill, Indexation rule, Labor share, Public employment, Public reform, Public sector, Wage, Wage adjustments, Wage bill, Wages, WP

Publication Details

  • Pages:

    23

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2014/192

  • Stock No:

    WPIEA2014192

  • ISBN:

    9781498350341

  • ISSN:

    1018-5941