Does Public-Sector Employment Fully Crowd Out Private-Sector Employment?

Download or read book Does Public-Sector Employment Fully Crowd Out Private-Sector Employment? written by Mr.Alberto Behar and published by International Monetary Fund. This book was released on 2013-06-12 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.