Public employment policies and regional unemployment differences

"This paper contributes to the existing literature on public employment showing that the wage setting policy of the public sector can be an important determinant of private employment and unemployment. I look at the case of geographically homogeneous wages across regions with different private...

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Bibliographic Details
Main Author: Caponi, Vincenzo
Institution:ETUI-European Trade Union Institute
Format: TEXT
Language:English
Published: Bonn 2014
IZA
Subjects:
Online Access:https://www.labourline.org/KENTIKA-19116240124919344229-Public-employment-policies-and.htm
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author Caponi, Vincenzo
author_facet Caponi, Vincenzo
collection Library items
description "This paper contributes to the existing literature on public employment showing that the wage setting policy of the public sector can be an important determinant of private employment and unemployment. I look at the case of geographically homogeneous wages across regions with different private sector productivity, and show that public employment generates a crowding out effect against private employment. This effect is larger the larger is the public sector share of total employment. I present a two region two sector model based on Pissarides (2000) heterogeneous search and matching model where vacancies are posted by the private and the public sector as in Quadrini and Trigari (2007) and Gomes (2014). I calibrate the model to the Italian labor market and show that the uniform wage setting policy adopted by the central government, in the presence of productivity unbalance across regions, is responsible for up to 40% of the unemployment gap between the North and South. Policy experiments suggest that reducing the size of public employment reduces unemployment in lower productive regions while allowing for regional wage setting in the public sector almost eliminates the unemployment differential."
format TEXT
geographic Italy
id 19116240124919344229_4d66e0f278bc4da3b492edda3a8cbe9c
institution ETUI-European Trade Union Institute
is_hierarchy_id 19116240124919344229_4d66e0f278bc4da3b492edda3a8cbe9c
is_hierarchy_title Public employment policies and regional unemployment differences
language English
physical 29 p.
Digital
publishDate 2014
publisher Bonn
IZA
spellingShingle Caponi, Vincenzo
employment
public sector
unemployment
wage policy
Public employment policies and regional unemployment differences
thumbnail https://www.labourline.org/Image_prev.jpg?Archive=108810292609
title Public employment policies and regional unemployment differences
topic employment
public sector
unemployment
wage policy
url https://www.labourline.org/KENTIKA-19116240124919344229-Public-employment-policies-and.htm