Abstract

http://ssrn.com/abstract=2010933
 
 

References (13)



 
 

Footnotes (17)



 


 



Can Public Sector Wage Bills Be Reduced?


Pierre Cahuc


National Institute of Statistics and Economic Studies (INSEE) - National School for Statistical and Economic Administration (ENSAE); Université Paris I Panthéon-Sorbonne - Equipe Universitaire de Recherche en Economie Quantitative (EUREQUA); French National Center for Scientific Research (CNRS); Centre for Economic Policy Research (CEPR); Institute for the Study of Labor (IZA)

Stephane Carcillo


affiliation not provided to SSRN

March 2012

NBER Working Paper No. w17881

Abstract:     
This paper analyzes the relation between public wage bills and public deficits in the OECD countries from 1995 to 2009. The paper shows that fiscal drift episodes, characterized by simultaneous increases in the GDP shares of public wage bills and budget deficits, are more frequent during booms and election years, but not during recessions, except for the 2009 exceptionally strong recession. The emergence of fiscal drift episodes during booms and election years is less frequent in countries with more transparent government, more freedom of the press, as well as in countries with presidential regimes and less union coverage. Inversely, fiscal tightening episodes, characterized by simultaneous decreases in the GDP shares of public wage bills and budget deficits, occur less often during booms than during recessions. The emergence of fiscal tightening episodes during recessions and election years is less frequent in countries with more union coverage.

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Number of Pages in PDF File: 46

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Date posted: February 25, 2012  

Suggested Citation

Cahuc, Pierre and Carcillo, Stephane, Can Public Sector Wage Bills Be Reduced? (March 2012). NBER Working Paper No. w17881. Available at SSRN: http://ssrn.com/abstract=2010933

Contact Information

Pierre Cahuc (Contact Author)
National Institute of Statistics and Economic Studies (INSEE) - National School for Statistical and Economic Administration (ENSAE) ( email )
92245 Malakoff Cedex
France
University of Paris 1 Pantheon-Sorbonne - Equipe Universitaire de Recherche en Economie Quantitative (EUREQUA) ( email )
106-112 Boulevard de l'Hopital
Paris Cedex 13, 75647
France
+33 1 4117 3717 (Phone)
+33 1 4117 3724 (Fax)
HOME PAGE: http://eurequa.univ-paris1.fr/membres/cahuc/
French National Center for Scientific Research (CNRS)
106-112 Boulevard de l'Hopital
75647 Paris Cedex 13
France
+33 4 44 07 82 06 (Phone)
+33 4 44 07 82 02 (Fax)
Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
Institute for the Study of Labor (IZA)
P.O. Box 7240
Bonn, D-53072
Germany
Stephane L. Carcillo
affiliation not provided to SSRN
Feedback to SSRN


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References:  13
Footnotes:  17

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