Public sector employment rigidity and macroeconomic fluctuation: A DSGE simulation for China.

ABSTRACT: Public sector employment in China has exhibited pronounced non-cyclical characteristics, with a recruiting scale and wage level showing limited responsiveness to economic fluctuations. The allure of civil service jobs in China has seen a significant resurgence post-COVID-19, with an observable increase in demand among educated job seekers for stable government positions amid growing economic uncertainties. This study investigates the implications of public sector employment rigidity on macroeconomic stability using a dynamic stochastic general equilibrium (DSGE) model integrated with search and matching (S&M) theory. Simulations incorporating alternative government job policies reveal that non-cyclical public employment exacerbates macroeconomic cyclical fluctuations. The low elasticity of

SUBMITTER: Zhang X 

PROVIDER: S-EPMC11432914 | biostudies-literature | 2024

REPOSITORIES: biostudies-literature