Can Public Sector Wage Bills Be Reduced?

This chapter examines the adjustment of public wage bills and public deficits over business and political cycles, and is organized as follows. Section 9.2 presents the relation between public deficits and public wage bills in Organization for Economic Cooperation and Development (OECD) countries over the last fifteen years, while Section 9.3 describes fiscal drift and fiscal tightening episodes. Section 9.4 analyzes the relations between the occurrence of fiscal drift and fiscal tightening episodes and the economic cycles, the election years, the transparency of governments, the freedom of the press, the union coverage, the political regime, and the electoral rules.