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|Trabalho de Evento
|(Mis)Allocation Effects of an Overpaid PublicSector
Santos, Marcelo Rodrigues dos
|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
|Ciências Sociais Aplicadas
|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
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|Coleção de Trabalhos Apresentados em Eventos
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|Artigo_2015_(Mis)Allocation Effects_Economic Dynamics.pdf
|Artigo_2015_(Mis)Allocation Effects_Economic Dynamics
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