Research Seminar: The unintended consequences of meritocratic government hiring
Ακαδημαϊκά Ερευνητικά Σεμινάρια στις Οικονομικές Επιστήμες, 2019-2020
Τμήμα Οικονομικών Επιστημών
Εθνικό και Καποδιστριακό Πανεπιστήμιο Αθηνών
Research Seminar Series in Economic Sciences, 2019-2020
Department of Economics
National and Kapodistrian University of Athens
Dear All,
I would like to inform you for the following research seminar: Wednesday, December 18, 2019, 14:00-15:30
Ioannis Kospentaris, Assistant Professor of Economics at Virginia Commonwealth University (VCU)
URL: https://sites.google.com/site/ioanniskospentaris/
Title: The unintended consequences of meritocratic government hiring
Location: Griparion Megaron, 1 Sofokleous Str., Psychopaidis Room (4th floor, 416)
Abstract: This paper studies the labor market distortions caused by a government that hires its employees through meritocratic processes. Government jobs are safer and pay on average higher wages than private sector jobs. As a result, the most productive workers prefer to work on the public than the private sector. Government attracts the most productive workers and hires them through a meritocratic process. Private sector jobs are less attractive and filled with lower quality workers. Private firms understand that the worker pool they face is of relatively low quality and do not have strong incentives to create new jobs. This creates a loss in the economy's total factor productivity and GDP. To quantify these losses, we extend the standard Diamond-Mortensen-Pissarides model of the labor market to incorporate a government sector that fills public sector jobs with meritocratic hiring. We calibrate the model to aggregate data from Greece and perform a series of counterfactuals to access the importance of meritocratic government hiring for the labor market. We find that the adverse effects on the economy's TFP and GDP can be sizable.
Organizers: Assoc. Professor Dimitris Kenourgios, Assist. Professor George
Dotsis and Assist. Professor Frago Kourandi, Department of Economics, NKUA.
Thank you