Public-Sector Employment in an Equilibrium Search and Matching Model

Albrecht, James; Robayo-Abril, Monica; Vroman, Susan

doi:10.2139/ssrn.2903089

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Public-Sector Employment in an Equilibrium Search and Matching Model

IZA Discussion Paper No. 10467

38 Pages Posted: 22 Jan 2017

See all articles by James Albrecht

James Albrecht

Georgetown University - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics

Susan Vroman

Georgetown University; IZA Institute of Labor Economics

Date Written: January 2017

Abstract

We extend the Diamond-Mortensen-Pissarides model of equilibrium unemployment to incorporate public-sector employment. We calibrate our model to Colombian data and analyze the effects of public-sector wage and employment policy on the unemployment rate, on the division of employment between the private and public sectors, and on the distributions of wages in the two sectors.

Keywords: public sector, search and matching, wages, unemployment

JEL Classification: J45, J64, D83

Suggested Citation: Suggested Citation

Albrecht, James W. and Robayo-Abril, Monica and Vroman, Susan B., Public-Sector Employment in an Equilibrium Search and Matching Model (January 2017). IZA Discussion Paper No. 10467, Available at SSRN: https://ssrn.com/abstract=2903089 or http://dx.doi.org/10.2139/ssrn.2903089