What Goes Up Must Come Down : Cyclicality in Public Wage Bill Spending
This paper analyzes the cyclicality of public sector wage bill spending in Europe and Central Asia and assesses the impact of wage bill spending on fiscal discipline before, during, and after the global financial crisis of 2008/09. While there are...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2014/01/18859631/goes-up-must-come-down-cyclicality-public-wage-bill-spending http://hdl.handle.net/10986/16817 |
| id |
okr-10986-16817 |
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| recordtype |
oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ANNUAL GROWTH ATTRITION AUTOMATIC STABILIZERS BILL BILLS BUDGET SURPLUS BUSINESS CYCLE BUSINESS CYCLES CAPITAL FLOWS CENTRAL BANK CONDITIONALITY CONSOLIDATION CONSUMPTION GROWTH CONTROL VARIABLES CROSS-COUNTRY STUDY CYCLICAL ADJUSTMENT DATA AVAILABILITY DEBT DEMAND FOR SERVICES DEPENDENT VARIABLE DEPENDENT VARIABLES DOWNWARD RIGIDITY DUMMY VARIABLE ECONOMIC CONDITIONS ECONOMIC CRISIS ECONOMIC CYCLE ECONOMIC DOWNTURNS ECONOMIC GROWTH ECONOMIC POLICY ECONOMIC SHOCKS EMPLOYMENT GROWTH EMPLOYMENT POLICIES ERROR TERM EXPENDITURE CATEGORIES EXPENDITURE GROWTH EXPENDITURES FINANCIAL CRISIS FISCAL ADJUSTMENTS FISCAL AGGREGATES FISCAL BALANCE FISCAL BALANCES FISCAL CONSOLIDATION FISCAL CONSTRAINTS FISCAL DEFICIT FISCAL DEFICITS FISCAL DISCIPLINE FISCAL MANAGEMENT FISCAL PERFORMANCE FISCAL PERSPECTIVE FISCAL POLICIES FISCAL POLICY FISCAL POSITION FISCAL POSITIONS FISCAL PROJECTIONS FISCAL RULES FISCAL TRANSPARENCY FIXED EFFECTS GOVERNMENT DEFICIT GOVERNMENT EMPLOYEES GOVERNMENT EMPLOYMENT GOVERNMENT EXPENDITURE GOVERNMENT SPENDING GROWTH RATE HEALTH SERVICES HIGH WAGE HOUSING INCOME INCOME GROWTH INFLATIONARY PRESSURES JOB SECURITY LABOR FORCE LOCAL CURRENCY LOCAL GOVERNMENT MACROECONOMIC POLICIES MINISTRY OF FINANCE MONETARY ECONOMICS NOMINAL WAGE NOMINAL WAGES OUTPUT GAP OUTPUT GAPS POLITICAL ECONOMY POLITICAL INSTITUTIONS POLITICIANS POPULATION GROWTH POVERTY REDUCTION PRIMARY OBJECTIVE PRIVATE SECTOR PRIVATE SECTOR WAGES PROGRAMS PUBLIC PUBLIC CHOICE PUBLIC CONSUMPTION PUBLIC ECONOMICS PUBLIC EMPLOYMENT PUBLIC EXPENDITURE PUBLIC FINANCE PUBLIC FINANCES PUBLIC FINANCIAL MANAGEMENT PUBLIC GOODS PUBLIC INVESTMENT PUBLIC INVESTMENT PROGRAMS PUBLIC INVESTMENTS PUBLIC PAY PUBLIC SECTOR PUBLIC SECTOR EMPLOYMENT PUBLIC SECTOR JOBS PUBLIC SECTOR PAY PUBLIC SECTOR WAGE PUBLIC SECTOR WAGE BILL PUBLIC SECTOR WAGE BILLS PUBLIC SECTOR WAGES PUBLIC SECTOR WORKFORCE PUBLIC SECTORS PUBLIC SERVICE PUBLIC SPENDING PUBLIC WAGE RANDOM WALK REAL GROWTH REAL GROWTH RATE REAL WAGE REAL WAGES RECESSIONS REMUNERATION RESOURCE CONSTRAINTS REVENUE COLLECTION ROBUSTNESS CHECKS SERIAL CORRELATION SOCIAL POLICY SOCIAL WELFARE SOCIAL WELFARE SPENDING STANDARD DEVIATION SURPLUS TOTAL EXPENDITURE TOTAL EXPENDITURES TOTAL LABOR FORCE TOTAL PUBLIC SPENDING TOTAL SPENDING TRANSITION ECONOMIES UNEMPLOYMENT UPWARD PRESSURE WAGE BILL WAGE EXPENDITURES WAGE GROWTH WAGE POLICIES WAGE_BILL |
| spellingShingle |
ANNUAL GROWTH ATTRITION AUTOMATIC STABILIZERS BILL BILLS BUDGET SURPLUS BUSINESS CYCLE BUSINESS CYCLES CAPITAL FLOWS CENTRAL BANK CONDITIONALITY CONSOLIDATION CONSUMPTION GROWTH CONTROL VARIABLES CROSS-COUNTRY STUDY CYCLICAL ADJUSTMENT DATA AVAILABILITY DEBT DEMAND FOR SERVICES DEPENDENT VARIABLE DEPENDENT VARIABLES DOWNWARD RIGIDITY DUMMY VARIABLE ECONOMIC CONDITIONS ECONOMIC CRISIS ECONOMIC CYCLE ECONOMIC DOWNTURNS ECONOMIC GROWTH ECONOMIC POLICY ECONOMIC SHOCKS EMPLOYMENT GROWTH EMPLOYMENT POLICIES ERROR TERM EXPENDITURE CATEGORIES EXPENDITURE GROWTH EXPENDITURES FINANCIAL CRISIS FISCAL ADJUSTMENTS FISCAL AGGREGATES FISCAL BALANCE FISCAL BALANCES FISCAL CONSOLIDATION FISCAL CONSTRAINTS FISCAL DEFICIT FISCAL DEFICITS FISCAL DISCIPLINE FISCAL MANAGEMENT FISCAL PERFORMANCE FISCAL PERSPECTIVE FISCAL POLICIES FISCAL POLICY FISCAL POSITION FISCAL POSITIONS FISCAL PROJECTIONS FISCAL RULES FISCAL TRANSPARENCY FIXED EFFECTS GOVERNMENT DEFICIT GOVERNMENT EMPLOYEES GOVERNMENT EMPLOYMENT GOVERNMENT EXPENDITURE GOVERNMENT SPENDING GROWTH RATE HEALTH SERVICES HIGH WAGE HOUSING INCOME INCOME GROWTH INFLATIONARY PRESSURES JOB SECURITY LABOR FORCE LOCAL CURRENCY LOCAL GOVERNMENT MACROECONOMIC POLICIES MINISTRY OF FINANCE MONETARY ECONOMICS NOMINAL WAGE NOMINAL WAGES OUTPUT GAP OUTPUT GAPS POLITICAL ECONOMY POLITICAL INSTITUTIONS POLITICIANS POPULATION GROWTH POVERTY REDUCTION PRIMARY OBJECTIVE PRIVATE SECTOR PRIVATE SECTOR WAGES PROGRAMS PUBLIC PUBLIC CHOICE PUBLIC CONSUMPTION PUBLIC ECONOMICS PUBLIC EMPLOYMENT PUBLIC EXPENDITURE PUBLIC FINANCE PUBLIC FINANCES PUBLIC FINANCIAL MANAGEMENT PUBLIC GOODS PUBLIC INVESTMENT PUBLIC INVESTMENT PROGRAMS PUBLIC INVESTMENTS PUBLIC PAY PUBLIC SECTOR PUBLIC SECTOR EMPLOYMENT PUBLIC SECTOR JOBS PUBLIC SECTOR PAY PUBLIC SECTOR WAGE PUBLIC SECTOR WAGE BILL PUBLIC SECTOR WAGE BILLS PUBLIC SECTOR WAGES PUBLIC SECTOR WORKFORCE PUBLIC SECTORS PUBLIC SERVICE PUBLIC SPENDING PUBLIC WAGE RANDOM WALK REAL GROWTH REAL GROWTH RATE REAL WAGE REAL WAGES RECESSIONS REMUNERATION RESOURCE CONSTRAINTS REVENUE COLLECTION ROBUSTNESS CHECKS SERIAL CORRELATION SOCIAL POLICY SOCIAL WELFARE SOCIAL WELFARE SPENDING STANDARD DEVIATION SURPLUS TOTAL EXPENDITURE TOTAL EXPENDITURES TOTAL LABOR FORCE TOTAL PUBLIC SPENDING TOTAL SPENDING TRANSITION ECONOMIES UNEMPLOYMENT UPWARD PRESSURE WAGE BILL WAGE EXPENDITURES WAGE GROWTH WAGE POLICIES WAGE_BILL Eckardt, Sebastian Mills, Zachary What Goes Up Must Come Down : Cyclicality in Public Wage Bill Spending |
| geographic_facet |
Europe and Central Asia |
| relation |
Policy Research Working Paper;No. 6760 |
| description |
This paper analyzes the cyclicality of
public sector wage bill spending in Europe and Central Asia
and assesses the impact of wage bill spending on fiscal
discipline before, during, and after the global financial
crisis of 2008/09. While there are important differences
across countries, the results show that public sector wage
bill spending tends to behave strongly pro-cyclically,
especially in transition economies. Moreover, while wage
bill spending is pro-cyclical during both good and bad
times, adjustments during economic downturns tend to be
sharper than expansions during periods of economic booms. In
addition, there is evidence of political cycles, with
stronger wage bill growth in pre-election periods. Finally,
the analysis reveals that while the size of the wage bill
does not seem to systematically affect fiscal discipline
across countries, expansions within countries over time are
associated with deteriorating fiscal positions. These
findings provide a strong impetus for public wage and
employment policies that aim to restrain excessive growth of
the wage bill during boom periods. This prospective
management of the wage bill would not only reduce the need
for painful adjustments during periods of fiscal
consolidation, but also contribute to strengthening the
overall countercyclical and stabilizing impact of fiscal policies. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Eckardt, Sebastian Mills, Zachary |
| author_facet |
Eckardt, Sebastian Mills, Zachary |
| author_sort |
Eckardt, Sebastian |
| title |
What Goes Up Must Come Down : Cyclicality in Public Wage Bill Spending |
| title_short |
What Goes Up Must Come Down : Cyclicality in Public Wage Bill Spending |
| title_full |
What Goes Up Must Come Down : Cyclicality in Public Wage Bill Spending |
| title_fullStr |
What Goes Up Must Come Down : Cyclicality in Public Wage Bill Spending |
| title_full_unstemmed |
What Goes Up Must Come Down : Cyclicality in Public Wage Bill Spending |
| title_sort |
what goes up must come down : cyclicality in public wage bill spending |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2014/01/18859631/goes-up-must-come-down-cyclicality-public-wage-bill-spending http://hdl.handle.net/10986/16817 |
| _version_ |
1764435044588322816 |
| spelling |
okr-10986-168172021-04-23T14:03:33Z What Goes Up Must Come Down : Cyclicality in Public Wage Bill Spending Eckardt, Sebastian Mills, Zachary ANNUAL GROWTH ATTRITION AUTOMATIC STABILIZERS BILL BILLS BUDGET SURPLUS BUSINESS CYCLE BUSINESS CYCLES CAPITAL FLOWS CENTRAL BANK CONDITIONALITY CONSOLIDATION CONSUMPTION GROWTH CONTROL VARIABLES CROSS-COUNTRY STUDY CYCLICAL ADJUSTMENT DATA AVAILABILITY DEBT DEMAND FOR SERVICES DEPENDENT VARIABLE DEPENDENT VARIABLES DOWNWARD RIGIDITY DUMMY VARIABLE ECONOMIC CONDITIONS ECONOMIC CRISIS ECONOMIC CYCLE ECONOMIC DOWNTURNS ECONOMIC GROWTH ECONOMIC POLICY ECONOMIC SHOCKS EMPLOYMENT GROWTH EMPLOYMENT POLICIES ERROR TERM EXPENDITURE CATEGORIES EXPENDITURE GROWTH EXPENDITURES FINANCIAL CRISIS FISCAL ADJUSTMENTS FISCAL AGGREGATES FISCAL BALANCE FISCAL BALANCES FISCAL CONSOLIDATION FISCAL CONSTRAINTS FISCAL DEFICIT FISCAL DEFICITS FISCAL DISCIPLINE FISCAL MANAGEMENT FISCAL PERFORMANCE FISCAL PERSPECTIVE FISCAL POLICIES FISCAL POLICY FISCAL POSITION FISCAL POSITIONS FISCAL PROJECTIONS FISCAL RULES FISCAL TRANSPARENCY FIXED EFFECTS GOVERNMENT DEFICIT GOVERNMENT EMPLOYEES GOVERNMENT EMPLOYMENT GOVERNMENT EXPENDITURE GOVERNMENT SPENDING GROWTH RATE HEALTH SERVICES HIGH WAGE HOUSING INCOME INCOME GROWTH INFLATIONARY PRESSURES JOB SECURITY LABOR FORCE LOCAL CURRENCY LOCAL GOVERNMENT MACROECONOMIC POLICIES MINISTRY OF FINANCE MONETARY ECONOMICS NOMINAL WAGE NOMINAL WAGES OUTPUT GAP OUTPUT GAPS POLITICAL ECONOMY POLITICAL INSTITUTIONS POLITICIANS POPULATION GROWTH POVERTY REDUCTION PRIMARY OBJECTIVE PRIVATE SECTOR PRIVATE SECTOR WAGES PROGRAMS PUBLIC PUBLIC CHOICE PUBLIC CONSUMPTION PUBLIC ECONOMICS PUBLIC EMPLOYMENT PUBLIC EXPENDITURE PUBLIC FINANCE PUBLIC FINANCES PUBLIC FINANCIAL MANAGEMENT PUBLIC GOODS PUBLIC INVESTMENT PUBLIC INVESTMENT PROGRAMS PUBLIC INVESTMENTS PUBLIC PAY PUBLIC SECTOR PUBLIC SECTOR EMPLOYMENT PUBLIC SECTOR JOBS PUBLIC SECTOR PAY PUBLIC SECTOR WAGE PUBLIC SECTOR WAGE BILL PUBLIC SECTOR WAGE BILLS PUBLIC SECTOR WAGES PUBLIC SECTOR WORKFORCE PUBLIC SECTORS PUBLIC SERVICE PUBLIC SPENDING PUBLIC WAGE RANDOM WALK REAL GROWTH REAL GROWTH RATE REAL WAGE REAL WAGES RECESSIONS REMUNERATION RESOURCE CONSTRAINTS REVENUE COLLECTION ROBUSTNESS CHECKS SERIAL CORRELATION SOCIAL POLICY SOCIAL WELFARE SOCIAL WELFARE SPENDING STANDARD DEVIATION SURPLUS TOTAL EXPENDITURE TOTAL EXPENDITURES TOTAL LABOR FORCE TOTAL PUBLIC SPENDING TOTAL SPENDING TRANSITION ECONOMIES UNEMPLOYMENT UPWARD PRESSURE WAGE BILL WAGE EXPENDITURES WAGE GROWTH WAGE POLICIES WAGE_BILL This paper analyzes the cyclicality of public sector wage bill spending in Europe and Central Asia and assesses the impact of wage bill spending on fiscal discipline before, during, and after the global financial crisis of 2008/09. While there are important differences across countries, the results show that public sector wage bill spending tends to behave strongly pro-cyclically, especially in transition economies. Moreover, while wage bill spending is pro-cyclical during both good and bad times, adjustments during economic downturns tend to be sharper than expansions during periods of economic booms. In addition, there is evidence of political cycles, with stronger wage bill growth in pre-election periods. Finally, the analysis reveals that while the size of the wage bill does not seem to systematically affect fiscal discipline across countries, expansions within countries over time are associated with deteriorating fiscal positions. These findings provide a strong impetus for public wage and employment policies that aim to restrain excessive growth of the wage bill during boom periods. This prospective management of the wage bill would not only reduce the need for painful adjustments during periods of fiscal consolidation, but also contribute to strengthening the overall countercyclical and stabilizing impact of fiscal policies. 2014-02-03T20:30:35Z 2014-02-03T20:30:35Z 2014-01 http://documents.worldbank.org/curated/en/2014/01/18859631/goes-up-must-come-down-cyclicality-public-wage-bill-spending http://hdl.handle.net/10986/16817 English en_US Policy Research Working Paper;No. 6760 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research Europe and Central Asia |