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Employment and Wages in the Public Sector: A Cross-Country Study

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  • International Monetary Fund

Abstract

We study the determinants of employment and wages in the public sector, using a new set of panel data for 34 LDCs and 21 OECD countries from 1972–992, by estimating equations suggested by an efficiency wage model. We find that government employment is positively associated with the relaxation of resource constraints (the revenue-to-GDP ratio and foreign financing in the case of developing countries and GDP per capita in the case of OECD countries), urbanization, the level of education, and certain countercyclical pressures for government hiring (the real effective exchange rate for developing countries and private employment for OECD countries). Certain measures of government wages are positively associated with government revenues and negatively associated with the level of education, government debt, and countercyclical pressures.

Suggested Citation

  • International Monetary Fund, 1995. "Employment and Wages in the Public Sector: A Cross-Country Study," IMF Working Papers 1995/070, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:1995/070
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    Cited by:

    1. Faiz Bilquees, 2006. "Civil Servants’ Salary Structure," Microeconomics Working Papers 22185, East Asian Bureau of Economic Research.
    2. Mr. Kamil Dybczak & Ms. Mercedes Garcia-Escribano, 2019. "Fiscal Implications of Government Wage Bill Spending," IMF Working Papers 2019/010, International Monetary Fund.
    3. Nadeem Ul Haque, 2007. "Why Civil Service Reforms Do Not Work," Labor Economics Working Papers 22192, East Asian Bureau of Economic Research.
    4. Jorge Martinez-Vazquez & Ming-Hung Yao, 2009. "Fiscal Decentralization and Public Sector Employment: A Cross-Country Analysis," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0903, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    5. Rama,Martin G., 1997. "Efficient public sector downsizing," Policy Research Working Paper Series 1840, The World Bank.
    6. Nadeem Ul Haque, 2002. "Vision and Ownership - Understanding Economic Reform," PIDE Books, Pakistan Institute of Development Economics, number 2002:1.
    7. Nelson Marconi & Paulo Arvate & João Moura Neto & Paulo Palombo, 2009. "Vertical transfers and the appropriation of resources by the bureaucracy: the case of Brazilian state governments," Public Choice, Springer, vol. 141(1), pages 65-85, October.
    8. Argandoña, Antonio, 2000. "Sobre la corrupción," IESE Research Papers D/418, IESE Business School.
    9. Gupta, Sanjeev & Verhoeven, Marijn, 2001. "The efficiency of government expenditure: experiences from Africa," Journal of Policy Modeling, Elsevier, vol. 23(4), pages 433-467, May.

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