Employment and Wages in the Public Sector: A Cross-Country Study

52 Pages Posted: 15 Feb 2006

See all articles by Aart Kraay

Aart Kraay

World Bank - Development Research Group (DECRG)

Caroline Van Rijckeghem

Istanbul Analytics

Date Written: July 1995

Abstract

We study the determinants of employment and wages in the public sector, using a new set of panel data for 34 LDCs and 21 OECD countries from 1972-1992, by estimating equations suggested by an efficiency wage model. We find that government employment is positively associated with the relaxation of resource constraints (the revenue-to-GDP ratio and foreign financing in the case of developing countries and GDP per capita in the case of OECD countries), urbanization, the level of education, and certain countercyclical pressures for government hiring (the real effective exchange rate for developing countries and private employment for OECD countries). Certain measures of government wages are positively associated with government revenues and negatively associated with the level of education, government debt, and countercyclical pressures.

JEL Classification: E6, H5, H7

Suggested Citation

Kraay, Aart and Van Rijckeghem, Caroline, Employment and Wages in the Public Sector: A Cross-Country Study (July 1995). IMF Working Paper, Vol. , pp. 1-51, 1995. Available at SSRN: https://ssrn.com/abstract=883218

Aart Kraay (Contact Author)

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States
202-473-5756 (Phone)
202-522-3518 (Fax)

HOME PAGE: http://econ.worldbank.org/staff/akraay

Caroline Van Rijckeghem

Istanbul Analytics ( email )

Istanbul
Turkey

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