Gomes, Pedro; Wellschmied, Felix - 2020
The size of the public sector in terms of employment and compensation has a strong life-cycle dimension. We establish a … quantitative partial-equilibrium life-cycle model with incomplete markets, private and public sectors, and risk-averse workers, and … use it to (i) calculate three dimensions of public-sector compensation: wage, pension, and job-security premia, and (ii …