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Are Recessions Good for Government Hires? The Effect of Unemployment on Public Sector Human Capital

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  • Congshan Zhang
  • John M. de Figueiredo

Abstract

Utilizing a large dataset on U.S. federal government employees covering 24 years, we estimate and analyze the persistent wage effect of entering government employment during recessions for recent college graduates and other new employees. Contrary to previous results in the literature for private sector employees, we document a significant and long-term wage increase for federal civil servants who enter government service in recessions. We show this result is robust to alternative samples and model specifications. We conclude by examining agency occupation composition and job matching as mechanisms for these results.

Suggested Citation

  • Congshan Zhang & John M. de Figueiredo, 2018. "Are Recessions Good for Government Hires? The Effect of Unemployment on Public Sector Human Capital," NBER Working Papers 24538, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:24538
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    References listed on IDEAS

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    6. Beaudry, Paul & DiNardo, John, 1991. "The Effect of Implicit Contracts on the Movement of Wages over the Business Cycle: Evidence from Micro Data," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 665-688, August.
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    Cited by:

    1. Daniel Puciato & Piotr Oleśniewicz & Michał Rozpara, 2020. "Quality of Life with Respect to Physical Activity Level in the Unemployed," Sustainability, MDPI, vol. 12(10), pages 1-11, May.
    2. Coffman, Lucas C. & Conlon, John J. & Featherstone, Clayton R. & Kessler, Judd B. & Mixon, Jessica, 2023. "Liquidity for teachers: Evidence from Teach For America and LinkedIn," Economics of Education Review, Elsevier, vol. 97(C).
    3. Joshua R. Bruce & John M. de Figueiredo, 2020. "Innovation in the U.S. Government," NBER Working Papers 27181, National Bureau of Economic Research, Inc.
    4. Fraenkel, Rebecca Cannon, 2022. "Local labor markets and job match quality: Teachers," Labour Economics, Elsevier, vol. 78(C).
    5. Joshua R. Bruce & John M. de Figueiredo, 2020. "Innovation in the US Government," NBER Chapters, in: The Role of Innovation and Entrepreneurship in Economic Growth, pages 433-464, National Bureau of Economic Research, Inc.

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    More about this item

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
    • K0 - Law and Economics - - General

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