Please use this identifier to cite or link to this item: https://repositorio.insper.edu.br/handle/11224/5011
Type: Trabalho de Evento
Title: (Mis)Allocation Effects of an Overpaid PublicSector
Author: Cavalcanti, Tiago
Santos, Marcelo Rodrigues dos
Publication Date: 2015
Abstract: In an economy in which the public sector is productive and factor inputs arerewarded according to their marginal productivity in both the public and the pri-vate sectors, the presence of a large government does not generate necessarily anyallocation problem. When the provision of public infrastructure is below its opti-mal scale, then an increase in the size of the government can lead to an increase intotal factor productivity (TFP). There is, however, a large body of evidence show-ing that for many countries the structure of wages and pensions and the laborlaw legislation are different for public and private employees. Such differencesaffect the occupational decision of agents and might generate some type of mis-allocation in the economy. We develop an equilibrium model with endogenousoccupational choice, heterogeneous agents and imperfect enforcement to studythe implications of an overpaid public sector. The model is estimated to be con-sistent with micro and macro evidence for Brazil and our counterfactual exercisesshow that public-private earnings premium can generate important allocation ef-fects and sizeable productivity losses.
Keywords (english terms): Public-Private earnings premium
misallocation; and develop-ment
Language: Inglês
CNPq Area: Ciências Sociais Aplicadas
URI: https://editorialexpress.com/conference/SED2015/program/SED2015.html
Copyright: O INSPER E ESTE REPOSITÓRIO NÃO DETÊM OS DIREITOS DE USO E REPRODUÇÃO DOS CONTEÚDOS AQUI REGISTRADOS. É RESPONSABILIDADE DOS USUÁRIOS INDIVIDUAIS VERIFICAR OS USOS PERMITIDOS NA FONTE ORIGINAL, RESPEITANDO-SE OS DIREITOS DE AUTOR OU EDITOR
Appears in Collections:Coleção de Trabalhos Apresentados em Eventos

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