TY  - RPRT
        AU  - Afonso, António
AU  - Gomes, Pedro Maia
        TI  - Interactions between Private and Public Sector Wages
        PY  - 2010/Nov/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 5322
        UR  - https://www.iza.org/publications/dp5322
        AB  - We examine the interactions between public and private sector wages per employee in OECD countries. The growth of public sector wages and of public sector employment positively affects the growth of private sector wages. Moreover, total factor productivity, the unemployment rate and the degree of urbanisation are also important determinants of private sector wage growth. With respect to public sector wage growth, we find that it is influenced by fiscal conditions in addition to private sector wages. We then set up a dynamic labour market equilibrium model with two sectors, search and matching frictions and exogenous growth to understand the interaction mechanisms. The model is quantitative consistent with the main estimation findings.
        KW  - employment
KW  - private sector wages
KW  - public sector wages
KW  - fiscal policy
        ER  -