Fiscal Pressures and Policy Choices
When governments face fiscal deficits, policymakers often consider cutting the public-sector wage bill.
However, such reductions may create long-term consequences for service delivery and state capacity.
Public Employment Levels Across Countries
Contrary to common assumptions, poorer countries employ far fewer public workers.
High-income countries average 87 public employees per 1,000 people, while low-income countries average only 23.
Development and Expanding Public Services
As countries become wealthier, public employment generally expands. Consequently, growing economies tend to rely more on government workers to provide essential public services.
Shortages in Essential Government Functions
Moreover, many developing countries lack enough personnel in crucial sectors such as education, healthcare, social security, and public safety.
These shortages are particularly severe in rural areas.
Security and Administrative Capacity Gaps
Similarly, fragile or conflict-affected countries often have far fewer police officers per capita despite greater security needs, highlighting major capacity gaps in government institutions.
Public Employment and Formal Labor Markets
Additionally, the public sector provides a large share of formal employment in developing countries, representing about 38% of global formal jobs and even higher shares in fragile states.
Opportunities for Women in the Public Sector
Importantly, public employment offers greater opportunities for women. Women represent about 46% of public-sector workers but only 33% of private-sector workers.
Skills Gaps in Public Workforces
Nevertheless, many government workers lack adequate professional skills. For example, numerous teachers lack subject mastery and many civil servants lack basic digital competencies.
Weak Recruitment and Hiring Systems
These shortcomings often result from weak recruitment systems. In many countries, large shares of public employees are hired without transparent or competitive selection processes.
The Role of Merit-Based Recruitment
Consequently, standardized examinations and competency-based hiring could improve workforce quality.
However, many existing exams emphasize legal knowledge rather than job-relevant skills.
Risks of Cutting Public Employment
Therefore, reducing public employment during fiscal consolidation may undermine services such as healthcare, education, security, water, and electricity provision.
Balancing Fiscal Discipline and State Capacity
Ultimately, policymakers must balance fiscal sustainability with effective governance. Too few public workers can weaken economic efficiency just as excessive payrolls threaten fiscal stability.
Source:
Herrera Gutierrez, A., & Hasnain, Z. (2026, March 6). Do policymakers underappreciate public employment? Brookings Institution. https://www.brookings.edu/articles/do-policymakers-underappreciate-public-employment/