Pensiero, N;
(2017)
In-house or outsourced public services? A social and economic analysis of the impact of spending policy on the private wage share in OECD countries.
International Journal of Comparative Sociology
, 58
(4)
pp. 333-351.
10.1177/0020715217726837.
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Abstract
This paper analyses the relationship between government spending and the distribution of private income between capital and labour. While most previous research assumes that government spending redistributes in favour of the less wealthy, I distinguish between types of expenditures that enhance the bargaining position of labour – i.e. unemployment benefits, public sector employment and investment in new capital – and labour-saving and pro-business types of expenditures – i.e. outsourcing to private firms. The results are derived from various panel regression techniques on a panel of 19 OECD countries in the period 1985-2010 and show that expenditures on public sector employment and to a lesser extent on new capital prevented the private wage share from declining further, even after controlling for labour market institutions, globalisation and technological change. Conversely, expenditures on outsourcing substantially contributed to reducing the private wage share. Unemployment benefits had a non-significant and negative effect on the private wage share, because their increase was the consequence of higher levels of unemployment rather than policy. Implications for theory and policy are drawn, including the support for a public employment-led spending policy.
Type: | Article |
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Title: | In-house or outsourced public services? A social and economic analysis of the impact of spending policy on the private wage share in OECD countries |
Open access status: | An open access version is available from UCL Discovery |
DOI: | 10.1177/0020715217726837 |
Publisher version: | https://doi.org/10.1177/0020715217726837 |
Language: | English |
Additional information: | This article is distributed under the terms of the Creative Commons Attribution 4.0 License (http://www.creativecommons.org/licenses/by/4.0/) which permits any use, reproduction and distribution of the work without further permission provided the original work is attributed as specified on the SAGE and Open Access page (https://us.sagepub.com/en-us/nam/open-access-at-sage). |
Keywords: | Government outsourcing, income inequality, power relations, public sector employment, spending policy, wage share |
UCL classification: | UCL UCL > Provost and Vice Provost Offices > School of Education UCL > Provost and Vice Provost Offices > School of Education > UCL Institute of Education UCL > Provost and Vice Provost Offices > School of Education > UCL Institute of Education > IOE - Education, Practice and Society |
URI: | https://discovery.ucl.ac.uk/id/eprint/1571700 |
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