Government wage, benefit, and employment decisions are not taken on a profit-maximizing basis and have a substantial … impact on aggregate labor market performance and unemployment. In a two-sector labor market model with free mobility of labor …, an increase in government wages or benefits reduces private sector employment, and government employment is not an …

The Greek unemployment rate rose from 2 percent in the 1960s to 9-10 percent in the 1990s. This reflected the increase …

equilibrium with unemployment always exists; and (ii) some of the unemployment is involuntary, in the sense that it consists of …