Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/52043 
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dc.contributor.authorGomes, Pedroen
dc.date.accessioned2011-09-23-
dc.date.accessioned2011-11-23T11:42:44Z-
dc.date.available2011-11-23T11:42:44Z-
dc.date.issued2010-
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
dc.language.isoengen
dc.publisher|aInstitute for the Study of Labor (IZA) |cBonnen
dc.relation.ispartofseries|aIZA Discussion Papers |x5321en
dc.subject.jelE24en
dc.subject.jelE32en
dc.subject.jelE62en
dc.subject.jelJ31en
dc.subject.jelJ45en
dc.subject.ddc330en
dc.subject.keywordpublic sector employmenten
dc.subject.keywordpublic sector wagesen
dc.subject.keywordunemploymenten
dc.subject.keywordfiscal shocksen
dc.titleFiscal policy and the labour market: The effect of public sector employment and wages-
dc.typeWorking Paperen
dc.identifier.ppn66878248Xen
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen

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