TY  - JOUR
AU  - Cahuc, Pïerre
AU  - Carcillo, Stephane
TI  - Can Public Sector Wage Bills Be Reduced?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 17881
PY  - 2012
Y2  - March 2012
DO  - 10.3386/w17881
UR  - http://www.nber.org/papers/w17881
L1  - http://www.nber.org/papers/w17881.pdf
N1  - Author contact info:
Pïerre Cahuc
Sciences Po, Paris
E-Mail: pierre.cahuc@sciencespo.fr

Stephane Carcillo
OECD
2, rue André Pascal
75775 Paris Cedex 16, France
E-Mail: stephane.carcillo@oecd.org
M1  - published as Pierre Cahuc, Stéphane Carcillo. "Can Public Sector Wage Bills Be Reduced?," in Alberto Alesina and Francesco Giavazzi, editors, "Fiscal Policy after the Financial Crisis" University of Chicago Press (2013)

M3  - presented at "Fiscal Policy after the Financial Crisis", December 12-13, 2011
AB  - 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 than during recessions. The emergence of fiscal tightening episodes during recessions and election years is less frequent in countries with more union coverage.
ER  -