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

12 Pages Posted: 1 May 2018 Last revised: 11 Jun 2018

See all articles by Congshan Zhang

Congshan Zhang

Duke University Department of Economics

John M. de Figueiredo

Duke University School of Law; Duke University - Fuqua School of Business; National Bureau of Economic Research (NBER); Duke Innovation & Entrepreneurship Initiative

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Date Written: April 14, 2018

Abstract

Utilizing a large dataset of 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.

Keywords: Public Sector Labor Markets, Wages, Public Administration

JEL Classification: J45, J31, H83 ,K0

Suggested Citation

Zhang, Congshan and de Figueiredo, John M., Are Recessions Good for Government Hires? The Effect of Unemployment on Public Sector Human Capital (April 14, 2018). Duke Law School Public Law & Legal Theory Series 2018-34. Available at SSRN: https://ssrn.com/abstract=3162631 or http://dx.doi.org/10.2139/ssrn.3162631

Congshan Zhang

Duke University Department of Economics ( email )

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John M. De Figueiredo (Contact Author)

Duke University School of Law ( email )

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Duke University - Fuqua School of Business ( email )

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