Why is the public sector more labor-intensive?
Why is the public sector more labor-intensive?
Rate this book:
About This Book
"Government-run entities are often more labor-intensive than private companies, even with identical production technologies. This need not imply slack in the public sector, but may be a rational response to its wage tax advantage over private firms. A tax-favored treatment of public production precludes production efficiency. It reduces welfare when labor supply is constant. With an elastic labor supply, a wage tax advantage of the public sector may improve welfare if it allows for a higher net wage. This would counteract the distortion of labor supply arising from wage taxation. Full privatization is never optimal if the labor supply elasticity is positive but small"--Forschungsinstitut zur Zukunft der Arbeit web site.
Buy This Book
As an Amazon Associate and Bookshop.org affiliate, BookOrb earns from qualifying purchases.
Write a Review
Sign in to write a review.
More by Panu Poutvaara
On human capital formation wit
On human capital formation with exit options
On the political economy of so
On the political economy of social security and public education
Smoking and social interaction
Smoking and social interaction
Social security incentives, hu
Social security incentives, human capital investment and mobility of labor
To draft or not to draft? effi
To draft or not to draft? efficiency, generational incidence, and political economy of military conscription