Fiscal Implications of Government Wage Bill Spending
IMF Working Papers, January 15, 2019
Source details
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- Fiscal Implications of Government Wage Bill Spending
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Bibliographic details
- Authors: Kamil Dybczak, Mercedes Garcia-Escribano
- Published: January 15, 2019
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781484392157.001
Study scope and methodology
- Sample: 137 advanced, emerging and low-income countries.
- Approach: panel VAR to identify differences in the dynamic behavior of revenues, nonwage expenditures, and the overall fiscal balance in response to changes in the wage bill.
- Publication details: Pages: 33; Volume: 2019; Issue: 010; Series: Working Paper No. 2019/010; DOI: https://doi.org/10.5089/9781484392157.001; Stock No: WPIEA2019010; ISBN: 9781484392157; ISSN: 1018-5941.
Key findings on fiscal dynamics
- Higher wage bill spending does not revert in the medium term.
- The initial worsening of the fiscal balance associated with higher wage bill spending:
- persists, but
- eventually halves as revenues increase while non-wage spending remains broadly unchanged.
- The interaction between wage bill changes and the three fiscal items (revenues, nonwage expenditures, overall fiscal balance) is alike and varies over time.
- Countries differ in how revenues, nonwage expenditures, and the fiscal balance behave following wage bill changes.
Cross-country variation and explanatory factors
- The paper seeks to explain cross-country variation by a set of country characteristics, including:
- the level of development,
- access to natural resources,
- public indebtedness levels.
Subject areas and keywords
- Subject: Environment, Expenditure, Fiscal policy, Fiscal stance, Labor, Natural resources, Wage adjustments, Wages.
- Keywords include: bill, bill development, bill expansion, bill financing, bill increase, bill spending, bill surge, Central Asia, Europe, Fiscal Policy, Fiscal stance, GDP share, Government Expenditure, Natural resources, pattern of wage bill financing, Public Employment, Public Wages, revenue, Wage adjustments, wage bill, wage bill change, wage bill expansion, wage expenditure, Wages, Western Europe, WP.
Source: IMF Working Papers — Fiscal Implications of Government Wage Bill Spending, By Kamil Dybczak and Mercedes Garcia-Escribano, January 15, 2019.
Content in this bundle
- Fiscal Implications of Government Wage Bill Spending, WP/19/10, January 2019