Friday, September 30, 2011

Posner on Government Workforce Size

Posner busts some myths regarding the size of government workforce in developed countries:
The percentage of public employees in the workforces of these [advanced] countries ranges from 6.35 percent in Singapore to 33.87 percent in Sweden. Indeed the three lowest countries, and the only ones with fewer than 10 percent public employees, are Japan, Singapore, and Taiwan. The highest countries after Sweden are Denmark (32.3 percent) and Norway (29.25 percent)... The United States is in approximately the middle, with 16.42 percent. Surprisingly, it is well ahead of Israel, Spain, Italy, Germany, France, and Portugal. The European countries with the lowest percentage of public workers are the Netherlands and Austria, but Portugal is only slightly above the Netherlands.
Many get this information wrong because they tend to associate government workforce with bureaucracy and bureaucracy with GDP share of government spending. These dimensions may correlate but the correlation is far from perfect, among other reasons, due to different levels of government transfers in each economy.

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