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Public jobs creation and unemployment dynamics

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  • Céline Choulet

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper raises the question of the dynamic effects of public spending in jobs on labor market performance. We use a dynamic matching model and study how public jobs creation affects endogenous workers' decisions to move on the labor market and private-sector firms' job creation and destruction decisions. We obtain that it exerts an attracting effect and a fiscal effect on the labor market that make the unemployment rate and job flows overshoot. As an empirical illustration, we estimate a SVAR model that focuses on the consequences of public job creations on unemployment, wages and job flows dynamics. We confirm our intuition: public employment has a significant ambiguous effect on private wages.

Suggested Citation

  • Céline Choulet, 2006. "Public jobs creation and unemployment dynamics," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00113357, HAL.
    • Handle: RePEc:hal:cesptp:halshs-00113357
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00113357
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    References listed on IDEAS

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    Cited by:

    1. Bruno Coquet, 2016. "Secteur Public : l'assurance chômage qui n'existe pas," SciencePo Working papers Main hal-03469971, HAL.
    2. repec:hal:spmain:info:hdl:2441/7ag1gjr51l8d58gfr2jt2i00t4 is not listed on IDEAS
    3. repec:spo:wpmain:info:hdl:2441/7ag1gjr51l8d58gfr2jt2i00t4 is not listed on IDEAS

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