1887

OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

English, French

The Labour Market Impact of Rapid Ageing of Government Employees

Some Illustrative Scenarios

This paper estimates and discusses some of the potential labour market implications arising from the rapid ageing of government employees in a number of OECD countries. Under alternative scenarios for future public employment policies, available labour resources for the private sector are estimated taking into account the declining age cohorts entering the labour market. These scenarios suggest that, in the absence of considerable increases in labour utilisation, maintaining government sector hiring at their historical share of new labour market entrants will entail sharp declines in the production of government services. On the other hand, if present levels of government services are to be preserved, governments are likely to hire an increasing share of labour market entrants, creating a strong crowding-out effect for the private sector. Alternatively, productivity in the government sector would have to increase substantially.

English

Keywords: social services, retirement, labour supply and demand, government sector, employment, productivity, ageing
JEL: J11: Labor and Demographic Economics / Demographic Economics / Demographic Trends, Macroeconomic Effects, and Forecasts; J45: Labor and Demographic Economics / Particular Labor Markets / Public Sector Labor Markets; O57: Economic Development, Innovation, Technological Change, and Growth / Economywide Country Studies / Comparative Studies of Countries; H11: Public Economics / Structure and Scope of Government / Structure, Scope, and Performance of Government
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