Public Sector Efficiency and Fiscal Austerity

This paper uses a simple model to analyze the forces that determine the size of the public sector and the quality of workers employed in that sector. Workers are heterogeneous, and the public sector chooses an employment strategy that maximizes a social welfare function U(s, Y) that depends on the s...

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Bibliographic Details
Corporate Author: International Monetary Fund
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 1998
Series:IMF Working Papers
Subjects:
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
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245 0 0 |a Public Sector Efficiency and Fiscal Austerity 
260 |a Washington, D.C.  |b International Monetary Fund  |c 1998 
300 |a 24 pages 
651 4 |a Benin 
653 |a Public Enterprises 
653 |a Wage Level and Structure 
653 |a Unemployment 
653 |a Labor 
653 |a Income economics 
653 |a Public sector 
653 |a Labor market 
653 |a Finance, Public 
653 |a Public sector wages 
653 |a Employment 
653 |a Wages 
653 |a Economic theory 
653 |a Demand and Supply of Labor: General 
653 |a Wages, Compensation, and Labor Costs: General 
653 |a Civil service & public sector 
653 |a Labor force 
653 |a Aggregate Labor Productivity 
653 |a Labour 
653 |a Macroeconomics 
653 |a Public employment 
653 |a Labor Force and Employment, Size, and Structure 
653 |a Labor markets 
653 |a Aggregate Human Capital 
653 |a Economic sectors 
653 |a Wage Differentials 
653 |a Intergenerational Income Distribution 
653 |a Public-Private Enterprises 
710 2 |a International Monetary Fund 
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490 0 |a IMF Working Papers 
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520 |a This paper uses a simple model to analyze the forces that determine the size of the public sector and the quality of workers employed in that sector. Workers are heterogeneous, and the public sector chooses an employment strategy that maximizes a social welfare function U(s, Y) that depends on the share of the labor force employed in public service s and private sector output Y. The government is fully informed about worker productivity. By examining the welfare properties of the possible outcomes, we are able to illuminate situations in which policies that seek to constrain the public sector may or may not improve economic efficiency