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Private and Government Employment in the OECD: Productivities and Wages
Author(s) -
Karras Georgios
Publication year - 2000
Publication title -
economic notes
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.274
H-Index - 19
eISSN - 1468-0300
pISSN - 0391-5026
DOI - 10.1111/1468-0300.00033
Subject(s) - private sector , government (linguistics) , productivity , economics , labour economics , wage , panel data , marginal product , production (economics) , econometrics , macroeconomics , economic growth , linguistics , philosophy
This paper estimates the productivity of private and government employment for a panel of 23 OECD economies over the 1961–1992 period, and investigates their relation to the government/private wage ratio. The paper finds that (i) the elasticities of output with respect to private and government employment are statistically significantly different from each other; (ii) the marginal products of private and government employment are not statistically significantly different, which suggests that government employment is neither over‐ nor under‐provided, and that shifting employment from one sector to the other is not likely to produce substantial output gains; and (iii) in most of the countries examined, government workers are overpaid in the sense that the government/private wage ratio exceeds the corresponding ratio of marginal products. (J.E.L. E24, E62).