Why Public Sector Job Creation Should be Fashionable

Author(s):  
William Mitchell
Keyword(s):  
1995 ◽  
Vol 1 (2) ◽  
pp. 183-194 ◽  
Author(s):  
Chris Ryan

There are many small community-based festivals which attract public sector funding. Such funding might be justified upon economic grounds of job creation and image re-creation. This paper describes one such festival, and highlights a discrepancy between the economic justification for support and the eventual revenue flows. Such results are not uncommon in studies of major events and public sector initiatives such as urban renewal, but it is not without interest that similar findings are paralleled in smaller community events. However, one factor often overlooked is that community festivals may retain discretionary leisure expenditure within a district that might otherwise be lost.


2019 ◽  
Vol 12 (2) ◽  
pp. 242-262 ◽  
Author(s):  
Chetan Ghate ◽  
Debojyoti Mazumder

Purpose Governments in both developing and developed economies play an active role in labor markets in the form of providing both formal public sector jobs and employment through public workfare programs. The authors refer to this as employment targeting. The purpose of the paper is to consider different labor market effects of employment targeting in a stylized model of a developing economy. In the context of a simple search and matching friction model, the authors show that the propensity for the public sector to target more employment can increase the unemployment rate in the economy and lead to an increase in the size of the informal sector. Design/methodology/approach The model is an application of a search and matching model of labor market frictions, where agents have heterogeneous abilities. The authors introduce a public sector alongside the private sector in the economy. Wage in the private sector is determined through Nash bargaining, whereas the public sector wage is exogenously fixed. In this setup, the public sector hiring rate influences private sector job creation and hence the overall employment rate of the economy. As an extension, the authors model the informal sector coupled with the other two sectors. This resembles developing economies. Then, the authors check the overall labor market effects of employment targeting through public sector intervention. Findings In the context of a simple search and matching friction model with heterogeneous agents, the authors show that the propensity for the public sector to target more employment can increase the unemployment rate in the economy and lead to an increase in the size of the informal sector. Employment targeting can, therefore, have perverse effects on labor market outcomes. The authors also find that it is possible that the private sector wage falls as a result of an increase in the public sector hiring rate, which leads to more job creation in the private sector. Originality/value What is less understood in the literature is the impact of employment targeting on the size of the informal sector in developing economies. The authors fill this gap and show that public sector intervention can have perverse effects on overall job creation and the size of the informal sector. Moreover, a decrease in the private sector wage due to a rise in public sector hiring reverses the consensus findings in the search and matching literature which show that an increase in public sector employment disincentivizes private sector vacancy postings.


1986 ◽  
Vol 10 (1) ◽  
pp. 85-98
Author(s):  
Jerry Lembcke ◽  
Martin Hart-Landsberg

Author(s):  
Ragui Assaad ◽  
Colette Salemi

In this chapter, we analyze the structure of employment and job creation in Jordan over the period from 2010 to 2016. This period coincided with a notable downturn in the economy, which substantially reduced the rate of job creation. Nonetheless, Jordan continued to rely on a growing population of migrant workers whose numbers were further boosted by the influx of Syrian refugees, resulting in approximately one out of two new jobs going to a non-Jordanian. For Jordanians, employment rates continued to fall, and employment became more precarious for the poorest, least educated workers, despite an increase in the share of public sector employment. Unskilled Jordanian males shifted out of informal regular wage employment into irregular work as well as non-employment. With regard to labor market dynamics, the share of the public sector in the first-time employment of new entrants had started to increase after an extended decline. The increase has now reversed again, but many recent entrants still managed to obtain public sector jobs five years after entry. The transition from school to work is very protracted, with a large fraction of youth remaining in the not in education, employment or training (NEET) state for an extended period of time.


Subject Parties' pre-election promises on the economy. Significance Opposition parties contesting the June 7 general election are seeking to benefit from the economy's weakness by bringing back the generous campaign pledges that were the stock-in-trade of leading politicians in the 1970s, 1980s and 1990s. For example, the main opposition Republican People's Party (CHP) is promising much larger benefits for pensioners, and a 50% increase in the minimum wage. It is also proposing tax-free fuel for farmers, ending sub-contracted labour in the public sector, additional job creation and social assistance schemes, and writing off 80% of credit card debt for the poorest consumers. Impacts Global conditions permitting, the election could contribute to a short-term recovery in consumer demand. Financial markets will pay closer attention to public finance indicators in the months ahead. In the event of a resolution or softening of Turkey's ideological divisions, the importance of electoral 'carrots' could increase.


1993 ◽  
Vol 4 (2) ◽  
pp. 328-332 ◽  
Author(s):  
Judith Sloan ◽  
Mark Wooden
Keyword(s):  

Subject India's problem of 'jobless' growth. Significance India’s ruling Bharatiya Janata Party is facing criticism over the country’s ‘jobless’ growth. Modi in 2014 promised to create 10 million jobs per year, but estimates provided by India’s Labour Bureau suggest his government is falling far short of this target. Impacts India’s main opposition Congress party will emphasise the lack of job creation in its election campaigning. Further spending on infrastructure to help create jobs would put pressure on India’s fiscal deficit target. The government’s policy of disinvestment in public sector undertakings will raise concerns over job losses.


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