Does Public-Sector Employment Fully Crowd Out Private-Sector Employment?

June 12, 2013

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Format: Chicago

Alberto Behar, and Junghwan Mok. Does Public-Sector Employment Fully Crowd Out Private-Sector Employment?, (USA: International Monetary Fund, 2013) accessed September 19, 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

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.

Subject: Employment, Employment rate, Government debt management, Labor, Public employment, Public financial management (PFM), Unemployment

Keywords: C. private-sector employment, CCA country, Crowding out, Crowding-out effect, Employment, Employment dataset, Employment equation, Employment rate, Employment rate, Government debt management, Labor force, MCD countries' employment data, MCD country, MENAP country, Middle East, Middle East and Central Asia, Outcomes in the MCD, Private sector, Private-sector employment, Public employment, Unemployment, WP

Publication Details

Pages:

38
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2013/146
Stock No:

WPIEA2013146
ISBN:

9781484329412
ISSN:

1018-5941

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