Heterogeneity and the Public Sector Wage Policy Articles uri icon

authors

  • BATISTA MAIA GOMES, PEDRO

publication date

  • August 2018

start page

  • 1469

end page

  • 1489

volume

  • 59

International Standard Serial Number (ISSN)

  • 0020-6598

Electronic International Standard Serial Number (EISSN)

  • 1468-2354

abstract

  • A model with search and matching frictions and heterogeneous workers was established to evaluate a reform of the public sector wage policy in steady state. The model was calibrated to the U.K. economy based on Labour Force Survey data. A review of the pay received by all public sector workers to align the distribution of wages with the private sector reduces steady-state unemployment by 1.4 percentage points.