Impacts of public employment on private employment: A theoretical analysis

At first glance, it can be thought that increasing in public employment have a positivie effect on genearal unemployment. But, public employment by crowding out private employment thus general unemployment level cannot decrease. In other words, cannot have any impact. In this study, impacts of public employment on private employment have been investigated by using search and matching models. Furthermore, goods are producted two sector, is substitutable or complementary, public wage is constant, job security in public sector, the situation of differentation unit productivity for two sector have been investigated to impacts of model's equilibrium. Role of these impacts of public-private employment interaction have been interpreted according to theroteical results obtained in the model.