Public service employment : a review of programs in selected OECD countries and transition economies

This paper examines one type of program that is used by many OECD and CEEC countries (Central and Eastern European countries) to ease the pain of structural adjustment and create jobs, namely Public Service Employment (PSE). Such programs are characterized by the employment of unemployed persons, financed by the government, to provide services and/or support infrastructure development (public works). Many of those in the"non-interventionist"camp view these programs as a waste of public funds that could be used in more productive economic investments. Some of those in the"interventionist camp"also view the programs in a similar manner and feel that, while someintervention is needed, PSE programs are not an appropriate tool. However, a number of OECD and CEEC countries are implementing such programs. This report reviews and summarizes the experiences of several countries-Denmark, France, Germany, Spain, the United Kingdom, the United States, Poland, and Hungary. While not a representative sample, some of these countries heavily emphasized the use of such programs. The American program, discontinued over 15 years ago, remains relevant because this is where some of the best research has been conducted. Hungary and Poland are included because of their obvious relevance to the situation of countries in transition.