EconStor >
Forschungsinstitut zur Zukunft der Arbeit (IZA), Bonn >
IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA) >

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10419/52043
  

Full metadata record

DC FieldValueLanguage
dc.contributor.authorGomes, Pedroen_US
dc.date.accessioned2011-09-23en_US
dc.date.accessioned2011-11-23T11:42:44Z-
dc.date.available2011-11-23T11:42:44Z-
dc.date.issued2010en_US
dc.identifier.urihttp://hdl.handle.net/10419/52043-
dc.description.abstractI build a dynamic stochastic general equilibrium model with search and matching frictions and two sectors in order to study the labour market effects of public sector employment and wages. Public sector wages plays an important role in achieving the efficient allocation. High wages induce too many unemployed to queue for public sector jobs, while if they are low, the government faces recruitment problems. The optimal steady-state wage premium depends mainly on the labour market friction parameters. In response to technology shocks, it is optimal to have procyclical public sector wages. Deviations from the optimal policy can increase the volatility of unemployment significantly. Public sector wage and employment shocks have mixed effects on unemployment. A wage shock raises the unemployment rate, while a reduction in the separations lowers it. Hiring more people can increase or decrease the unemployment rate. All shocks raise the wage and crowd out employment in the private sector. In the empirical part, I employ Bayesian methods to estimate the parameters of the model for the United States. I find that the direct search mechanism between the two sectors is an important element to explain business cycle fluctuations of the labour market variables.en_US
dc.language.isoengen_US
dc.publisherIZA Bonnen_US
dc.relation.ispartofseriesDiscussion paper series // Forschungsinstitut zur Zukunft der Arbeit 5321en_US
dc.subject.jelE24en_US
dc.subject.jelE32en_US
dc.subject.jelE62en_US
dc.subject.jelJ31en_US
dc.subject.jelJ45en_US
dc.subject.ddc330en_US
dc.subject.keywordpublic sector employmenten_US
dc.subject.keywordpublic sector wagesen_US
dc.subject.keywordunemploymenten_US
dc.subject.keywordfiscal shocksen_US
dc.titleFiscal policy and the labour market: The effect of public sector employment and wagesen_US
dc.typeWorking Paperen_US
dc.identifier.ppn66878248Xen_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

Files in This Item:
File Description SizeFormat
66878248X.pdf836.44 kBAdobe PDF
No. of Downloads: Counter Stats
Show simple item record
Download bibliographical data as: BibTeX

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.