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NBER Working Papers and Publications
|March 2012||Can Public Sector Wage Bills Be Reduced?|
with Pïerre Cahuc: w17881
This paper analyzes the relation between public wage bills and public deficits in the OECD countries from 1995 to 2009. The paper shows that fiscal drift episodes, characterized by simultaneous increases in the GDP shares of public wage bills and budget deficits, are more frequent during booms and election years, but not during recessions, except for the 2009 exceptionally strong recession. The emergence of fiscal drift episodes during booms and election years is less frequent in countries with more transparent government, more freedom of the press, as well as in countries with presidential regimes and less union coverage. Inversely, fiscal tightening episodes, characterized by simultaneous decreases in the GDP shares of public wage bills and budget deficits, occur less often during booms ...
|February 2012||Can Public Sector Wage Bills Be Reduced?|
with Pierre Cahuc
in Fiscal Policy after the Financial Crisis, Alberto Alesina and Francesco Giavazzi, editors
This chapter examines the adjustment of public wage bills and public deficits over business and political cycles, and is organized as follows. Section 9.2 presents the relation between public deficits and public wage bills in Organization for Economic Cooperation and Development (OECD) countries over the last fifteen years, while Section 9.3 describes fiscal drift and fiscal tightening episodes. Section 9.4 analyzes the relations between the occurrence of fiscal drift and fiscal tightening episodes and the economic cycles, the election years, the transparency of governments, the freedom of the press, the union coverage, the political regime, and the electoral rules.