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The debate on the public sector has been central in structural adjustment programmes applied in developing countries during recent years. The common grounds of the discussion have been the size of the public sector, its role and its efficiency in delivering services. The common criticisms of the 1980s are that the public sector is too big, overstaffed and inefficient. Examines these issues under a long‐term perspective. Finds that at the aggregated level there is no clear‐cut evidence to support those criticisms of the size of the public sector in developing countries. Compared with industrialized countries, there is no particular evidence of the public sector being too big in the developing world. However, it appears that the sequence of the adjustment process has negatively affected the performance of important parts of the public sector by distorting the proportion of wage and non‐wage expenditures, disregarding their complementarity. The consequent imbalance between inputs and employment has resulted in practical overstaffing.

The purpose of the article is to analyse the interconnections between formal policy reforms and operational policies, specifically between new governance and employment policy. The main question is what happens to public employment policies when they are contracted out to non‐public (for‐profit and not‐for‐profit) agencies?

The case is the contracting out of the public employment services in Australia, Holland, and Denmark. The data consists of in‐depth interviews with key respondents in the three countries, observations at service delivery agencies, and desk studies of existing research.

The new quasi‐market models seem to have difficulties in living up to the preconditions for a well‐functioning market, as well as political expectations. Contracted out employment systems do not seem to create higher efficiency, innovation, quality, and less bureaucracy than previous public bureaucracies. But a quasi‐market model, on the other hand, does seems to create a new type of employment policy, and new conditions for steering and governing the labour market and employment policy. This implies that choosing a quasi‐market model involves much more than a discussion about “technicalities” like (cost) efficiency and productivity. Some of the most important – but often neglected and depoliticised – policy changes seem to emerge from changes of the institutional set‐up rather than changes of specific laws and ministerial orders.

The article is innovative in trying to identify relationships between management structure and policy content. Often these changes are analysed in separate disciplines, and isolated from each other. In this article we provide an integrated and multidisciplinary approach.

Public employment in India is often viewed as a source of job security. Hence, public employment seems to propel human security in India away from poverty and social exclusion. In the recent work, a significant attention has been accorded to understand how globalisation has impacted on job security and thereby human security in many developing countries. The literature revolves around two opposing effects of globalisation on the human security in a country: firstly, the efficiency hypothesis posits that globalisation tends to reduce the size of the government of a country to enable the country to attain comparative advantage for gainfully trading in the global economy. A reduction in the capacity of the government is argued to lead to a decline in public employment and, hence, a decline in human security with rising globalisation. Secondly, the compensation hypothesis argues that the size of government, and hence public employment, will increase with globalisation mainly to suitably manage a domestic economy in a complex global setting with an increased role of government for creating social stability and social security. Depending on the relative strengths of the mutually opposing forces of globalisation on public employment, the impact of globalisation on the human security of a country is ambiguous. A gap in the existing literature is a lack of documentation of the Indian experience. In this work, the authors seek to empirically test if globalisation has increased, or decreased, job security in India.

The influx of expatriates to the Gulf Cooperation Council (GCC) countries has led to labor imbalance inducing these countries to initiate workforce nationalization policies. However, despite the policies' emphasis on increasing the presence of nationals in all sectors, employing nationals in the private sector is still a critical challenge for policymakers. This paper explores local job seekers' and employees' perceptions of employment choices in the private and public sectors.

Adopting a qualitative approach, data were collected through in-depth interviews with 28 local job seekers, either not currently employed or employed but seeking another job.

The data revealed a contextualized understanding of positive and negative connotations pertaining to employment in the private and public sectors in Qatar.

Understanding nationals' negative preconceived notions against working in the private sector and the perceived benefits of public sector employment lays the groundwork for developing measures to help policymakers to create labor market-oriented policies that stimulate mobility between the public and private sectors.

This study contributes to the workforce nationalization literature in the GCC countries by examining local job seekers' perceptions associated with employment in the private sector and the public sector. A closer examination of why nationals are hesitant to enter the private sector can propel the pendulum towards higher success rates of workforce nationalization.

The purpose of this paper is to examine the impact of National Rural Employment Guarantee Scheme (NREGS) on farm sector wage rate. This identification strategy rests on the assumption that all districts across India would have had similar wage trends in the absence of the program. The author argues that this assumption may not be true due to non-random allocation of districts to the program’s three phases across states and different economic growth paths of the states post the implementation of NREGS.

To control for overall macroeconomic trends, the author allows for state-level time fixed effects to capture the differences in growth trajectories across districts due to changing economic landscape in the parent-state over time. The author also estimates the expected farm sector wage growth due to the increased public work employment provision using a theoretical model.

The results, contrary to the existing studies, do not find support for a significantly positive impact of NREGS treatment on private cultivation wage rate. The theoretical model also shows that an increase in public employment work days explains very little of the total growth in cultivation wage post 2004.

This paper looks specifically at farm sector wage growth and the possible impact of NREGS on it, accounting for state specific factors in shaping farm wages. Theoretical estimates are presented to overcome econometric limitations.

Governments in both developing and developed economies play an active role in labor markets in the form of providing both formal public sector jobs and employment through public workfare programs. The authors refer to this as employment targeting. The purpose of the paper is to consider different labor market effects of employment targeting in a stylized model of a developing economy. In the context of a simple search and matching friction model, the authors show that the propensity for the public sector to target more employment can increase the unemployment rate in the economy and lead to an increase in the size of the informal sector.

The model is an application of a search and matching model of labor market frictions, where agents have heterogeneous abilities. The authors introduce a public sector alongside the private sector in the economy. Wage in the private sector is determined through Nash bargaining, whereas the public sector wage is exogenously fixed. In this setup, the public sector hiring rate influences private sector job creation and hence the overall employment rate of the economy. As an extension, the authors model the informal sector coupled with the other two sectors. This resembles developing economies. Then, the authors check the overall labor market effects of employment targeting through public sector intervention.

In the context of a simple search and matching friction model with heterogeneous agents, the authors show that the propensity for the public sector to target more employment can increase the unemployment rate in the economy and lead to an increase in the size of the informal sector. Employment targeting can, therefore, have perverse effects on labor market outcomes. The authors also find that it is possible that the private sector wage falls as a result of an increase in the public sector hiring rate, which leads to more job creation in the private sector.

What is less understood in the literature is the impact of employment targeting on the size of the informal sector in developing economies. The authors fill this gap and show that public sector intervention can have perverse effects on overall job creation and the size of the informal sector. Moreover, a decrease in the private sector wage due to a rise in public sector hiring reverses the consensus findings in the search and matching literature which show that an increase in public sector employment disincentivizes private sector vacancy postings.

Job creation is the most important challenge facing Egypt today. Economic performance has been uneven over the last three decades, but even in periods of high growth, the job content of growth has not been strong enough to absorb new entrants. The 1990s and early 2000s saw the acceleration in the structural adjustments. The fast growing role of the private sector and the contraction of public sector employment are considered the most important characteristics of this period. The paper aims to discuss these issues.

The findings of the paper support the view that sectoral shifts, in response to structural transformations, have been an important source of private employment fluctuations in Egypt, and the implications on aggregate employment have varied with the stage of the business cycle in the private sector. Moreover, one of the important findings of the paper shows that public sectoral shifts have caused stronger effects on private employment growth than private sectoral shifts do. However, failure to align public sectoral shifts with growth in the private sector has had a negative effect on employment growth, increasing aggregate unemployment.

The findings also confirm the crowding-out effect of higher government expenditure on private employment, particularly during a boom. Finally, the findings show that changes in domestic credit going to the private sector as a ratio of private GDP, and higher exports ratio to GDP have statistically significant positive effects on private employment growth.

Overall, the findings signify the importance of policies that aim at increasing the job content of private-led growth in Egypt.

How does wage employment differ from self-employment in Nigeria? The purpose of this paper is to explore the determinants of participation and the resulting wage differentials with respect to individual employees in self-employment, public-wage employment and private-wage employment in the Nigerian labour market.

Using the most recent cross-sectional data from the general household survey (GHS) panel for 2012/2013 wave (Nigeria National Bureau of Statistics (NBS), 2012), this paper applies the multinomial logit estimation for the sectoral choice and selectivity-corrected wage equation where appropriate.

Consistent with other studies in Africa, the findings confirm that the Nigerian labour market is heterogeneous. Factors affecting sectoral choices differ greatly across the analysed sectors. Education, age and geopolitical zones are observed to be the major determinants of sectoral participation. On the basis of BFG estimates, the authors find evidence of downward bias only in the public sector wages that is due to the (Bourguignon, Fournier & Gurgand) allocation of individuals with better unobservable characteristics out of the public employment into the self-employment. Consequently, the human capital variables become no longer significant in the public wage equation after correcting for selectivity bias. However, education and gender are found to be significant determinants of wages in the private and self-employment sectors. The magnitude of the gender coefficient is more negative in self-employment, which may imply a possible gender wage gap in that sector. While the North-East, North-West and South-South zones are highly statistically significantly different from zero in the public sector, only the South-South and South-West zones appear to be significant in self-employment. Hence, such zonal variables are a reflection of differences in economic incentives in Nigeria.

Given the unregulated and precarious nature of employment in self-employment, adequate policies that address gender bias orientations are suggested.

This paper is one of the first that addresses sectoral choices and wage differentials among public, private and self-employment using the most recent GHS data for Nigeria.

The purpose of this paper is to investigate if public provision of employment support services to youth leads to reduced informality and increased wages in transition economies.

The author uses the school-to-work transition data sets of the International Labor Organization for seven transition economies of Southeast Europe and the Commonwealth of Independent States. The author focuses on two econometric issues: the selectivity into informal employment and the endogeneity of the public employment support service provision with respect to informal employment and wages. The authors achieves identification by employing internal regressors which are uncorrelated with the product of heteroskedastic errors, a-la Lewbel (2012), as the author could not prove the external validity of the commonly used external instruments in similar contexts.

Results suggest that the public provision of employment support services matters for relegating informal employment, but not for wages, in general. Placement in education or training programs is most powerful in reducing informal employment among the four different employment support services, while only advice for job search works positively for wages probably through enabling better match.

Increasing budget allocations, varying the array of public employment support measures, enhanced targeting, and advancement of the profiling system may significantly contribute to strengthening the public employment support service effect on youth employment in transition economies.

The paper brings a couple of novelties to the current literature. First, it is among the early papers dealing with the issue of informality, public employment support service and labor market prospects of youth in general in a rigorous manner. Second, it fills an important gap for transition economies which were less researched due to the long-lasting transition process as well due to data scarcity. Third, it utilizes the recently collected School-to-Work Transition Surveys (SWTS). Finally, and likely most importantly, it thoroughly addresses the issues of selectivity bias and endogeneity of PESS by utilizing a recent approach of Lewbel (2012) whereby internally generated variables are used as instruments. Hence, the paper accounts for the endogeneity stemming from unobservables in a novel manner, contrary to the common approaches in the literature based either on propensity score matching addressing selectivity on observables only, or relying on commonly used instruments in the labor market literature – mainly regional employment variables – whose external validity is easily disputed.