Private and Government Employment in the OECD: Productivities and Wages

Posted: 1 Dec 2000

See all articles by Georgios Karras

Georgios Karras

University of Illinois at Chicago - Department of Economics

Abstract

This paper estimates the productivity of private and government employment for a panel of 23 OECD economies over the 1961-1992 period, and investigates their relation to the government/private wage ratio. The paper finds that (i) the elasticities of output with respect to private and government employment are statistically significantly different from each other; (ii) the marginal products of private and government employment are not statistically significantly different, which suggests that government employment is neither over- nor under-provided, and that shifting employment from one sector to the other is not likely to produce substantial output gains; and (iii) in most of the countries examined, government workers are overpaid in the sense that the government/private wage ratio exceeds the corresponding ratio of marginal products.

JEL Classification: E24, E62

Suggested Citation

Karras, Georgios, Private and Government Employment in the OECD: Productivities and Wages. Available at SSRN: https://ssrn.com/abstract=233668

Georgios Karras (Contact Author)

University of Illinois at Chicago - Department of Economics ( email )

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