Heterogeneity and the public sector wage policy
Institute of Labor Economics, Bonn
IZA - Bonn
2017
30 p.
wage policy ; public sector ; unemployment ; wage rate
Discussion Paper
1191
Wages and wage payment systems
English
Bibliogr.;Statistics
"A model with search and matching frictions and heterogeneous workers was established to evaluate a reform of the public sector wage policy in steady-state. The model was calibrated to the UK economy based on Labour Force Survey data. A review of the pay received by all public sector workers to align the distribution of wages with the private sector reduces steady-state unemployment by 1.4 percentage points."
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