Does public-sector employment fully crowd out private-sector employment?

Alberto Behar and Junghwan Mok

We quantify the extent to which public-sector employment crowds out private-sector employment using specially assembled datasets for a large cross-section of developing and advanced countries, and discuss the implications for countries in the Middle East, North Africa, Caucasus and Central Asia. These countries simultaneously display high unemployment rates, low private-sector employment rates and high proportions of government-sector employment. Regressions of either private-sector employment rates or unemployment rates on two measures of public-sector employment point to full crowding out. This means that high rates of public employment, which incur substantial fiscal costs, have a large negative impact on private employment rates and do not reduce overall unemployment rates

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Year of publication:	2013
Authors:	Behar, Alberto ; Mok, Junghwan
Publisher:	Washington, DC : IMF
Subject:	Erwerbstätigkeit \| Employment \| Öffentlicher Sektor \| Public sector \| Privatwirtschaft \| Private sector \| Verdrängungseffekt \| Crowding out \| Mittlerer Osten \| Middle East \| Nordafrika \| North Africa \| Kaukasus \| Caucasus \| Zentralasien \| Central Asia

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Extent:	Online-Ressource (37 S.) graph. Darst.
Series:	IMF working papers. - Washington, DC : IMF, ZDB-ID 2108494-4. - Vol. 13/146
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Arbeitspapier ; Working Paper ; Graue Literatur ; Non-commercial literature
Language:	English
Notes:	Description based upon print version of record Systemvoraussetzungen: Acrobat Reader Cover; Contents; I. Introduction; II. Literature Review; III. Data Sources; IV. Descriptive Analysis; Figures; Figure 1: Overview of Key Labor Statistics, 2008-2011 average; Figure 2: Unemployment Rate, weighted by labor force; Figure 3: Private-Sector Employment Rate; Figure 4: The Importance of Public-Sector Employment, 2008-2011 average; Figure 5: Proportion of Public Employment in the MCD countries, latest year; Tables; Table 1: Public and Private Employment in the MCD Countries; Figure 6: Unemployment and Public Employment, 2006-11 average Figure 7: Correlation between Public- and Private-Sector Employment, 2006-11 averageV. Econometric Analysis; A. Specification and Estimation; B. Unemployment and Public Employment; C. Private-Sector Employment and Public Employment; Table 2: Regression of Unemployment Rate on Public Employment Rate; Table 3: Regression of Private-Sector Employment Rate on Public Employment Rate; D. MCD Analysis; E. Implications for Labor Force Participation; Table 4: Regression with MCD Region Interaction Terms; VI. Conclusion; References; Appendix I. Regressions of Unemployment Rate on Public Employment TablesTable A.1: Impact of Public Employment on Unemployment Rate, FE with AR(1); Table A.2: Impact of Public Employment on Unemployment Rate, RE; Table A.3: Impact of Public Employment on Unemployment Rate, RE with AR(1); Table A.4: Impact of Public Employment on Unemployment Rate, Systems GMM; Appendix II. Regressions of Private-Sector Employment on Public Employment; Table A.5: Impact of Public on Private-Sector Employment Rate, FE with AR(1); Table A.6: Impact of Public on Private-Sector Employment Rate, RE; Table A.7: Impact of Public on Private-sector Employment Rate, RE with AR(1) Table A.8: Impact of Public on Private-Sector Employment Rate, System GMMAppendix III. Regression with MCD Interaction Terms and Controls; Table A.9: Regression of Unemployment Rate with the MCD Region Interaction Terms; Table A.10: Regression of Private-sector Employment Rate with the MCD Region Interaction Terms
ISBN:	978-1-4843-2941-2
Other identifiers:	10.5089/9781484329412.001 [DOI]
Source:	ECONIS - Online Catalogue of the ZBW

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