Hugo Jales, Syracuse University

We show that public sector jobs in Brazil are characterized by price and quantity controls in the form of wages larger than those of private sector counterparts but with a limited number of employment contracts (analogous to a quota). Entrance to public sector jobs is decided according to the results of a double-blinded admission exam. The resulting combination prevents the usual price mechanism from equating the value of supplying labor to private or public sector jobs. We show that the equilibrium mechanism operates through increases in the candidate-to-vacancy ratios that reduce the likelihood of success at any attempt to access a public sector job. In our empirical analysis, we look at exams administered between 2007 and 2017. We show that the value of time spent waiting is quite close to and sometimes even larger than the average gain, dissipating most, if not all, rents that would otherwise be generated by the public wage premium.

DATE: Friday, November 8, 2024

TIME: 3:30-5:00 p.m.

LOCATION: Fronczak 444