Publication Type

Journal Article

Publication Date

9-1998

Abstract

Our model endogenizes the share of public sector employment in a neoclassical growth model. Under the assumptions that public sector production is labor intensive and the elasticity of substitution between capital and labor is less than one, the public share of employment is shown to decline with a rise in capital per effective worker. Our theory predicts that periods of high productivity growth are associated with a rising trend of the public share of employment. This prediction conforms well with U.S. experience from 1950-1995.

Keywords

Employment, growth model, public sector

Discipline

Economics | Growth and Development | Public Economics

Research Areas

Applied Microeconomics

Publication

American Economist

Volume

42

Issue

2

First Page

73

Last Page

79

ISSN

0569-4345

Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.

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