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IEB11-42_Brueckner.pdf (352.97 KB)

Tipus de document

Document de treball

Data de publicació

2011

Llicència de publicació

cc-by-nc-nd, (c) Brueckner et al., 2011
Si us plau utilitzeu sempre aquest identificador per citar o enllaçar aquest document: https://hdl.handle.net/2445/116595

Beaches, sunshine, and public-sector pay: theory and evidence on amenities and rent extraction by government workers

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Resum

The absence of a competitive market and the presence and strength of public-sector labor unions make it likely that public-sector pay reflects an element of rent extraction by government workers. In this paper, we test a specific hypothesis that connects such rent extraction to the level of local amenities. Specifically, although migration of taxpayers limits the extent of rent-seeking, public-sector workers may be able to extract higher rents in regions where high amenities mute the migration response. We develop a theoretical model that predicts such a link between public-sector wage differentials and local amenities, and we test the model’s predictions by analyzing variation in these wage differentials and amenities across states. The evidence reveals that public-sector wage differentials are, in fact, larger in the presence of high amenities, with the effect being stronger for unionized public-sector workers, who are likely better able to exercise political power in extracting rents.

Matèries

Igualtat retributiva, Sector públic, Variables (Matemàtica)

Matèries (anglès)

Pay equity, Public sector, Variables (Mathematics)

Citació

Col·leccions

IEB (Institut d’Economia de Barcelona) – Working Papers

Citació

BRUECKNER, Jan K. and NEUMARK, David. Beaches, sunshine, and public-sector pay: theory and evidence on amenities and rent extraction by government workers. IEB Working Paper 2011/42. [consulted: 27 of August of 2026]. Available at: https://hdl.handle.net/2445/116595

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