Resumen de Government wages and labour market outcomes

European Commission Directorate-General for Economic and Financial Affairs

• As most European countries are trying to consolidate public finances, whilst also attempting to improve cost competitiveness for external rebalancing and abate unemployment, it is crucial to assess government wage formation, its outcomes and interaction with private sector labour costs. This paper provides an overview of government wage setting regimes, an empirical analysis of the public wage premium and a dynamic analysis of the interlinkages between government and private sector wages along both the long- and short-run.