Employment shifts, economic reform and the changes in public/private sector wages in Mexico: 1987–1997

Over the last decade, the public sector in Mexico experienced substantial fiscal reform, divestiture of public enterprises, and the elimination of many regulations affecting pay and employment. This study analyzes the changes in the public/private sector differences in wages during the 1987–1997 period. The results from analyzing microdata from the Encuesta Nacional de Empleo Urbano show that relative public sector wages increased from 1987 to 1997. Most of the relative wage increase in the public sector can be explained by increases in the price of skills and by changes in sorting across sectors. The results have important public policy implications since they suggest that public sector workers earn more and their wages have grown faster than those of their private sector counterparts. As such, policies contemplating public sector reform should take into account the effect of these measures on the inter-sectoral income distribution and the overall economic growth. First version received: April 2000/Final version received: December 2000     

The nexus between public sector corruption and private sector efficiency: Evidence from worldwide firm-level data

Anti-corruption is highlighted as one of the key institutional principles by the United Nations, as corruption hinders the progress in achieving sustainable development goals. However, the extant literature on how private firms' efficiency is influenced by corruption prevailing in regulatory agencies across economies has been inconclusive. Analyzing the World Bank Enterprise Survey data across 45,121 firms from 80 countries, this study finds that bribe payments to corrupt public officials by firms causes bureaucratic delays. Employing an instrumental variable Tobit framework to address the issue of endogeneity inherited with observational data, this study demonstrates that an increase in the magnitude of bribes and depth of corruption by one percentage point separately expands the firm managers' time being spent on regulatory requirements by 2.78 percentage points and 2.47 percentage points, respectively. The findings are robust to different specifications. The results imply the importance of promoting anti-corruption measures across countries to create a conducive environment for firms to enhance efficiency, and thereby to achieve sustainable development goals successfully.     

Central Government versus private sector wages and cognitive skills: evidence using endogenous switching regression

The importance of estimation techniques that allow for nonrandom selection of workers into the public and private sectors has been established in the theoretical and empirical literature. A separate body of work has explored the contribution of cognitive and other basic skills to earnings. This article brings together these two strands of empirical literature using Adult Literacy and Lifeskills (ALL) survey data for Norway and Bermuda. In the case of Norway, results from both Ordinary Least Squares (OLS) and a switching regression model agree that cognitive skills are rewarded more in the public sector and that, in both sectors, the main effect is the direct effect of skills on earnings. In the case of Bermuda, however, switching regression estimates are substantially different with respect to the how skills affect earnings; furthermore, controlling for cognitive skills changes the nature of selection and, hence, the estimates of sector wage differentials.     

德国支持企业私营部门研发创新促进产学研合作的政策措施

作为世界公认的创新型国家之一,德国联邦政府构建了具有自身特色的企业为主体、产学研密切结合的国家创新体系,形成了一系列行之有效的促进“经济与科技结合”的政策措施.各类企业已成为德国研发创新活动的主体,是研发创新投入的主要力量.围绕德国联邦政府支持企业私营部门研发创新及促进产学研合作相关政策开展了综合研究,并对其主要内容和特色进行了归纳总结.     

A note on schooling and wage inequality in the public and private sector

The few studies that have examined the wage impact of education across the earning distribution have focused on high-income countries and show education to be more profitable at the top of the distribution. The implication is that education may increase inequality. Extending the analysis to 16 East Asian and Latin American countries, in Latin America we observe a pattern similar to that of Europe/North America (increasing wage effects), while in East Asia the wage effects are predominantly decreasing by earnings quantile. However, once the analysis is performed separately for the public and the private sector, it is revealed that the strongly decreasing impact of schooling on earnings in the public sectors of East Asian countries is responsible for the overall observed decreasing pattern, while the impact of schooling on earnings in the private sectors of these countries is non-decreasing.     

The cyclicality of consumption,wages and employment of the public sector in the euro area

This study empirically examines the business cycle behaviour of public consumption and its main components, the public wage bill (including its breakdown into compensation per employee and public employment) and intermediate consumption, in the euro area aggregate, euro area countries and a group of selected non-euro area Organization for Economic Co-operation and Development (OECD) countries (Denmark, Sweden, the UK, Japan and the US). It looks across a large number of variables and methods, using annual data from 1960 to 2005. It finds robust evidence supporting that public consumption, wages and employment co-move with the business cycle in a pro-cyclical manner with 1–2 year lags, notably for the euro area aggregate and euro area countries. The findings reflect mainly the correlation between cyclical developments, but also point to an important role of pro-cyclical discretionary fiscal policies.     

Short-run relations between the real sector and inflation

Zusammenfassung Die österreichische Hartwährungspolitik strebt Geldwertstabilisierung mit dem Zwischenziel einer niedrigen und wenig schwankenden inflationsrate an. Da gleichzeitig das wirtschaftspolitische Endziel der Beschäftigungssicherung verfolgt wird, könnte ein negativer Phillipskurven-Zusammenhang (zwischen Inflationsrate und Arbeitslosenquote) auf einen Zielkonflikt hinweisen. Die Arbeit kommt zu dem Schluß, daß mit der Hartwährungspolitik das genannte Zwischenziel erreicht wurde, daß aber in der kurzen Frist ein negativer Einfluß auf Wirtschaftswachstum und Beschäftigung empirisch nicht nachweisbar ist. Die Untersuchung wird anhand inverser Phillipskurven geführt, in denen eine Variable des realen Sektors als Funktion der Inflationsrate (und diese wiederum in Abhängigkeit von der Währungspolitik) dargestellt ist. Kausalitätstests lassen es gerechtfertigt erscheinen, den kurzfristigen Zusammenhang zwischen realen Variablen und der Inflationsrate in der inversen Form der Phillipskurve auszudrücken.

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List of variables in empirical regressions ALQ unemployment rate, in percent of dependent labour force - AOS unemployed persons minus vacanies, in percent of dependent labour force - AQS seasonally adjustedALQ - BESL logarithm of the number of dependent employees - BL logarithm of real gross domestic product - D73 dummy variable for introduction of value-added tax in 1973 - D84 dummy variable for tax changes at the beginning of 1984 - EP anticipated inflation, as derived from equation (13) - IPL logarithm of industrial production index - PDL logarithm of German consumer price index - PL logarithm of Austrian consumer price index - PML logarithm of Austrian import unit values - RP unanticipated inflation, as derived from equation (13) - S1, S2, S3 seasonal dummies - VALQ deviations from deterministic trend ofALQ - VAQS deviations from deterministic trend ofAQS - VBESL deviations from deterministic trend ofBESL - VBL deviations from deterministic trend ofBL - VIPL deviations from deterministic trend ofIPL - V1, V2, V3, V4 variables of inflation uncertainty (see Note 6) - XRL logarithm of Austrian merchandise exports, in volume terms I gratefully acknowledge valuable comments on a preliminary version of this paper by F. X. Hof and G. Tichy. I am fully responsible, however, for remaining flaws.     

Toward ‘privatization’ of public sector output: decentralized contracting for public and private goods

Public sector goods and services can be produced in the private sector. The challenge is to provide incentives for allocative and technological efficiency. Either of two mechanisms is proposed to accomplish this. To ensure allocative efficiency, the proposed mechanisms require knowledge of the complete schedule of benefits. Alternatively, they can use information available on benefits in an efficient manner. Costs need not be known to authorities. Profit maximization leads to efficient private sector responses to cost changes over time. Either mechanism can be combined with the demand revealing process to circumvent the need for ex ante information on benefits.     

Efficiency wages and union-firm bargaining with private information

We consider efficiency wage effects in a union-firm bargaining model with private information. We show that an increase in the efficiency wage effects does not necessarily increase the wage level at equilibrium, even when the wage bargaining with private information is close to one with complete information. However, if it is commonly known that the firm is stronger than the union and the demand is sufficiently elastic, then an increase in the efficiency wage effects increases for sure the wage at equilibrium.JEL Classification: J41, J50, J52We thank Juan Dolado and two anonymous referees for valuable comments. Vincent Vannetelbosch is Chercheur Qualifié at the Fonds National de la Recherche Scientifique. The research of Ana Mauleon has been made possible by a fellowship of the Fonds Européen du Développement Economique Régional (FEDER). Financial support from the Belgian French Communitys program Action de Recherches Concertée 99/04-235 (IRES, Université catholique de Louvain) is gratefully acknowledged.     

A dynamic model of the interaction between state and private sector

The state behaves as if it maximizes a constrained objective function which is a weighted representation of the interests of politicians and bureaucrats. The weights determine the type of state. Firms maximize a discounted flow of dividends. The interaction between state and private sector follows from a minimum consumption level, the job preferences of labour and state influenced labour productivity.     

R&D competition between public and private sectors

We investigate a mixed market where a welfare-maximizing public research institute competes against profit-maximizing private firms. We investigate R&D competition by using a standard model of patent races where each firm chooses both its innovation size and R&D expenditure. We find that the innovation size (R&D expenditure) chosen by the public institute is too small (too large) from the viewpoint of social welfare, respectively, and so the government should control the public institute appropriately. We also discuss the welfare implications of privatization of public research institutes.     

Ageing, productivity and wages in Austria: sector level evidence

In this paper we analyse the link between the age structure of the labour force and average labour productivity as well as average wage across industrial sectors. While this intermediate economic level has been under-explored up to now, we will argue that it provides valuable insights in several respects. Our analysis is based on a panel data set ranging over 6 years (2002–2007). It covers the sectors of mining, manufacturing and market oriented services in the Austrian economy. Our results exhibit a positive correlation of the share of older employees and productivity, whereas we cannot find any evidence for a significant relationship of the share of younger employees and productivity. Moreover, the estimated age-wage pattern does not hint at an over-payment of older employees.     

On the interaction between public and private capital in economic growth

This paper introduces two forms of interaction between private and public capital in an endogenous growth model in which productive government expenditure takes the form of a stock-variable and public capital is used in part as an input in the production of final output and in part to increase its own supply. While the first form of interaction involves the stocks of the two capital-goods and takes place within the final output sector through the specification of the aggregate production function (Cobb?CDouglas vs. CES), the second one concerns the rates of investment in the two kinds of capital. The share of productive public expenditure devoted to output production can be either exogenous or endogenous. Our results suggest that when this share is exogenous, along the balanced growth path the optimal growth rate of the economy is a positive function of the degree of complementarity between the two forms of investment. When the share of productive public expenditure devoted to output production is endogenous, the public capital share in GDP becomes, along with the model??s preference parameters, an important determinant of the economy??s long run growth. We also find that the optimal growth rate is an increasing function of the elasticity of substitution between public and private capital inputs in goods production, and is independent of the complementarity/substitutability between the two forms of investment.     

Labour market effects of public capital stock: evidence for the Spanish private sector

This paper provides a new rationale for the positive effect of public capital stock on employment and wages. We show that higher levels of public capital reduce wages along the wage equation and enhance employment due to the resulting larger elasticity of labour demand with respect to wages. The estimation of a structural model for the Spanish private sector reveals that this wage channel is empirically relevant. We use the estimated parameters to simulate the recent incidence of the ratio of public to private capital stock on the private sector economic performance. We find (i) sizeable effects on employment, capital stock and gross domestic product, and (ii) that the wage channel is particularly important for employment.     

The public–private sector gender wage differential in Britain: evidence from matched employee-workplace data

This article shows that little of the gender earnings gap in the public and private sectors in Britain are explained by differences in employee characteristics. The differences in workplace characteristics, however, make a significant, sizeable contribution. It is shown that performance related pay and company pension schemes are associated with higher relative earnings in the private sector, whilst increased provision of family-friendly employment practices in the public sector is associated with higher relative earnings for women.     

A dynamic model of the interaction between the state and the private sector

The main characteristic of the micro model developed in this paper is the endogenous behaviour of the state. The state is treated as an organization in its own right, made up of politicians and bureaucrats. Its behaviour is related to the interests of these agents and their relative power within the state organization. The economic consequenses of this interest representation by the state, and the impact of structural coercion (constraints), originating from the private sector, on these consequences, are our main concern. A particular feature of the model is that it allows for the fact that technology may be dependent on the state's activities.     

Agility evaluation in public sector

Agility metrics are difficult to define in general, mainly due to the multidimensionality and vagueness of the concept of agility itself. In this paper, a knowledge-based framework is utilized for the measurement and assessment of public sector＇s agility by A. T. Kearney model. In this research, the authors used Z2 test in SPSS software. So, the authors discovered that the General Office of Standards ＆ Industrial Research of Sistan ＆ Baluchestan Province in Iran is agile. Finally, the authors determine the weakness points of organization by Friedman test.     

Competition between private and public schools: testing stratification and pricing predictions

When there are peer effects in education, private schools have an incentive to vary tuition to attract relatively able students. Epple and Romano [American Economic Review 88(1) (1998) 33] develop a general equilibrium model characterizing equilibrium pricing and student selection into schools when peer effects are present. The model predicts that competition will lead private schools to give tuition discounts to more able students, and that this will give rise to an equilibrium exhibiting stratification by income and ability between the public and private sectors and to a hierarchy of schools within the private sector. The model also yields a variety of comparative-static predictions. The predictions of the model are tested in this paper using a unique data set assembled by Figlio and Stone [Research in Labor Economics (1999) 115]. Tests of equilibrium predictions of the model reveal that: The propensity to attend private school increases with both income and ability, and, among private schools, the propensity to attend the highest-tuition schools rises with both income and ability. Within private schools, tuition declines with student ability, with a substantial number of even high-income households paying little or no tuition. The correlation between income and ability is greater in public than private schools. Tests of comparative static predictions of the model reveal that: Both income and ability become stronger predictors of private school attendance as public school expenditure falls. Income becomes increasingly important in determining placement in the private school hierarchy as public school expenditure falls. Discounts to ability in the lowest-quality private school decline as public school expenditure rises while discounts to ability in the highest-quality private school are little affected by changes in public school expenditure. Expenditure in private schools rises as expenditure in public schools increases. These empirical results are consistent with the predictions of the theoretical model.     

Assessing the contribution of public capital to private production: Evidence from the German manufacturing sector

Using time-series cross-section data from the manufacturing sector of the 11 West German 'Bundesländer' (Federal States) from 1970 to 1996, I examine the impact of public capital on private production. My econometric analysis explicitly takes into account four of the most frequent specification issues in the context of time-series crosssection data analysis: serial correlation, groupwise heteroscedasticity, cross-sectional correlation and non-stationarity of data. For all approaches and tested specifications, I find that public capital is a significant input for production in the manufacturing sector. Moreover, I find that differences in public capital endowment can explain long-term differences in productivity across the Bundesländer. One tentative conclusion that can be drawn from this finding is that differences in public capital endowment might also explain a part of the still-existing productivity gap between manufacturing in East and West Germany. However, I emphasise that the existence of positive effects of public capital on private production is a necessary, but not a sufficient condition for concluding that public investments should be boosted in the future.