IMF Working Papers

Rightsizing Brazil’s Public-Sector Wage Bill

By Izabela Karpowicz, Mauricio Soto

October 8, 2018

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Izabela Karpowicz, and Mauricio Soto. Rightsizing Brazil’s Public-Sector Wage Bill, (USA: International Monetary Fund, 2018) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Brazil’s public-sector wage bill is comparatively high. It grows inertially and competes with other spending. Rightsizing the wage bill could stimulate administrative efficiency and bring more equity into a system where public employees earn more than private in comparable professions. Most importantly, however, a reform is necessary to comply with the Federal government expenditure ceiling and the subnational fiscal responsibility rules. A reform should thus encompass all government levels, and all careers, and should aim to achieve a real decrease in salaries and lower employment. In the medium term, a review of the compensation structure should rationalize the multitude if wage grids, merge allowances into the base wage, and align public sector compensation to private wages in low-skilled professions.

Subject: Employment, Expenditure, Government wage bill, Labor, Public sector wages, Wage adjustments, Wages

Keywords: Bill, Bill adjustment, Bill growth, Bill management, Bill policy, Bill rule, Bill statistics, Employee compensation, Employment, Europe, Fiscal rules, Government, Government wage bill, Log-earnings specification, Pay, Private sector, Public sector wages, Public spending, Wage adjustments, Wage bill, Wages, WP

Publication Details

  • Pages:

    24

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2018/225

  • Stock No:

    WPIEA2018225

  • ISBN:

    9781484374924

  • ISSN:

    1018-5941

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