The IMF Working Papers series is designed to make IMF staff research available to a wide audience. With nearly 300 released each year, working papers cover a wide range of theoretical and analytical topics, including balance of payments, monetary and fiscal issues, global liquidity, and national and international economic developments.
Brazil's public-sector wage bill is comparatively high. It grows inertially and competes
with other spending. Rightsizing the wage bill could stimulate administrative efficiency
and bring more equity into a system where public employees earn more than private in
comparable professions. Most importantly, however, a reform is necessary to comply with
the Federal government expenditure ceiling and the subnational fiscal responsibility rules.
A reform should thus encompass all government levels, and all careers, and should aim to
achieve a real decrease in salaries and lower employment. In the medium term, a review
of the compensation structure should rationalize the multitude if wage grids, merge
allowances into the base wage, and align public sector compensation to private wages in
low-skilled professions.
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