Optimal Public Sector Wages

• 成果类型: Article
• 署名作者: Gomes, Pedro
• 署名单位: Universidad Carlos III de Madrid
• 刊物名称: ECONOMIC JOURNAL
• ISSN/ISSBN: 0013-0133
• DOI: 10.1111/ecoj.12155
• 发表日期: 2015
• 页码: 1425-1451
• 关键词: fiscal-policy; labor-market; equilibrium unemployment; Government consumption; cyclical behavior; business-cycle; real wage; EMPLOYMENT; PRIVATE; VACANCIES

摘要

I build a dynamic stochastic general equilibrium model with search and matching frictions to determine the optimal public sector wage policy. Public sector wages are crucial in achieving efficient allocation of jobs. High wages induce too many unemployed to queue for public sector jobs, in turn raising unemployment. The optimal wage depends on the frictions in the two sectors. Following technology shocks, public sector wages should be pro-cyclical and deviations from the optimal policy significantly increase the volatility of unemployment.