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

14 Pages Posted: 23 Apr 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 2018

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

Zhang, Congshan and de Figueiredo, John M., Are Recessions Good for Government Hires? The Effect of Unemployment on Public Sector Human Capital (April 2018). NBER Working Paper No. w24538. Available at SSRN: https://ssrn.com/abstract=3167052

Congshan Zhang (Contact Author)

Duke University Department of Economics ( email )

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John M. De Figueiredo

Duke University School of Law ( email )

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Duke University - Fuqua School of Business ( email )

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