There is a large body of evidence showing that for many countries the structure of wages and pensions and the labor law legislation are different for public and private employees. Such differences affect the occupational choice of agents and might generate some type of misallocation. We develop a life-cycle model with endogenous occupational choice and heterogeneous agents to study the implications of an overpaid public sector. The model is estimated to be consistent with micro and macro evidence for Brazil, a country with a high public sector earnings premium. Our counterfactual exercises demonstrate that public-private earnings premium can generate important allocation effects and sizeable productivity losses. For instance, a reform that would decrease the public-private wage premium from its benchmark value of 19% to $15 and would align the pension of public sector workers with the one in place for private sector workers could increase aggregate output by 11.2% in the long-run without any decrease in the supply of public infrastructure. We provide a decomposition of the aggregate effect into changes in factors accumulation and changes in TFP and implement a welfare distributive analysis.

中文翻译：

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公共部门支付过多的（误）分配效应

有大量证据表明，对于许多国家，公共和私人雇员的工资和养老金结构以及劳动法法规是不同的。这种差异会影响代理商的职业选择，并可能产生某种类型的分配错误。我们开发了具有内生职业选择和异质代理的生命周期模型，以研究公共部门薪酬过高的影响。估计该模型与巴西的微观和宏观证据是一致的，巴西是一个公共部门收入溢价很高的国家。我们的反事实演习表明，公私收入溢价会产生重要的分配效应和相当大的生产率损失。例如，一项改革将使公私营部门的工资溢价从其基准值从19％降至15美元，并使公共部门工人的养老金与私营部门工人的养老金保持一致，从长远来看可以使总产出增加11.2％而不减少公共基础设施的供应。我们将总体影响分解为因素积累变化和全要素生产率变化，并实施福利分配分析。