Public and private employment over the business cycle: a ratchet theory of government growth

Article Abstract:

Previous researchers have attempted to explain the growth in the size of government over time. Some have observed a "ratchet" effect and have attributed these observed jumps in the relative size of government to ideological shifts in response to severe crises. We explain these observed ratchets as the consequence of asymmetries in the response of government employment to the business cycle. A public-choice oriented model of the employment response to the cycle is developed and applied to state and local government employment data. The data confirm the presence of ratchet effects that correspond to the business cycle. Moreover, virtually all of the growth in the ratio of state and local government employment to private employment has occurred during recessions. (Reprinted by permission of the publisher.)

Research, Employment, Business cycles, Public institutions

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Robust employment growth in 2000 in OECD area

Article Abstract:

Employment grew 1.2% in 2000 in Organization for Economic Cooperation and Development countries. It is expected to grow 0.6% in 2001.

International Affairs, World, Organization for Econ Co-op & Dev, Statistical Data Included, Forecasts and trends, 2000 AD, Organization for Economic Cooperation and Development, Employment forecasting

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