期刊
OXFORD BULLETIN OF ECONOMICS AND STATISTICS
卷 62, 期 3, 页码 391-415出版社
WILEY-BLACKWELL
DOI: 10.1111/1468-0084.00177
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Government wage, benefit, and employment decisions are not taken on a profit-maximizing basis, and have a substantial impact on aggregate labour market performance and unemployment. In a two-sector labour market model with free mobility of labour, an increase in government wages or benefits reduces private sector employment, and government employment is not an effective counter-cyclical instrument. Empirical tests for Greece confirm that the expansion of the public sector in the 1980s contributed to the deterioration of labour market performance.
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