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Public Employment and Compensation Reform During Times of Fiscal Consolidation

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  • Lorenzo Forni
  • Natalija Novta

Abstract

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.

Suggested Citation

  • Lorenzo Forni & Natalija Novta, 2014. "Public Employment and Compensation Reform During Times of Fiscal Consolidation," IMF Working Papers 2014/192, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2014/192
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    Cited by:

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    3. Juin‐Jen Chang & Hsieh‐Yu Lin & Nora Traum & Shu‐Chun S. Yang, 2021. "Fiscal Consolidation and Public Wages," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 53(2-3), pages 503-533, March.
    4. Hans Pitlik, 2017. "Österreich 2025 – Verwaltungsreform zwischen Effizienzstreben und Reformwiderständen. Ein Überblick," WIFO Monatsberichte (monthly reports), WIFO, vol. 90(3), pages 205-217, March.
    5. Marta Rahona-López & Inés P. Murillo-Huertas & Maria del Mar Salinas-Jiménez, 2016. "Wage differentials by sector and gender: a quantile analysis for the Spanish case," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 19(1), pages 20-38, March.
    6. Sónia Araújo & Stéphanie Guichard, 2018. "Costa Rica: Restoring fiscal sustainability and setting the basis for a more growth-friendly and inclusive fiscal policy," OECD Economics Department Working Papers 1484, OECD Publishing.
    7. Olga V. Bogacheva & Oleg V. Smorodinov, 2020. "Disbalance in Pay Structure of Employees in Federal Budgetary Institutions," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 6, pages 113-125, December.

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