Munich Personal RePEc Archive

Wage Policy in the Public Sector and Income Distribution

Sheshinski, Eytan (1982): Wage Policy in the Public Sector and Income Distribution. Published in:

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Abstract

This paper examines the direct and indirect e�ects of a government's wage policy in the public sector on the overall income distribution in the economy. By direct e�ects we mean the wage di�erentials in the public sector. Indirect e�ects refer to the secondary e�ects of the government's policy through changes in the occupational structure. This analysis is based on a simple model suggested by Tinbergen (1951) and Roy (1951), followed by Houthakker (1976). In the numerical calculations, the model yields realistic conclusions which underline the importance of government wage policy.

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