, the government faces recruitment problems. The optimal steady-state wage premium depends mainly on the labour market … 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 …

We set up a model with search and matching frictions to understand the effects of employment and wage policies, as well …-sector jobs. Wage and employment policies impose an endogenous constraint on the number of workers the government can hire through …

-minimizing government acts with a wage schedule that does not equate supply and demand. Second, our economy features heterogeneity across … public-sector wage differential and excess underemployment account for 15 percent of the education bias, with the remaining … accounted for by technology. In a counterintuitive fashion, we find that more wage compression in the public sector raises …

wage policies in the public sector on unemployment and education decisions. The effects on the educational composition of …

in France and 10 percent in Spain and the US. Private-sector workers would forgo 0.5 to 2.9 percent of their wage to have …

wage growth. With respect to public sector wage growth, we find that it is influenced by fiscal conditions in addition to …

use it to (i) calculate three dimensions of public-sector compensation: wage, pension, and job-security premia, and (ii …

their wage relative to well-matched workers …

expensive older workers into retirement. Based on the seniority wage model developed by Lazear (1979), we discuss steep … seniority wage profiles as incentives for firms to dismiss older workers before retirement. Conditional on individual retirement … incentives, e.g., social security wealth or health status, the steepness of the wage profile will have different incentives for …