Public Sector Shock

Public Sector Shock

The Impact of Policy Retrenchment in Europe

Edited by Daniel Vaughan-Whitehead

The goal of this volume is to study this ‘public sector shock’. While budgetary reforms seek to ensure a more balanced and sound economic policy, they may generate new work inequalities among public sector employees, most particularly among women, who account for a considerable proportion of public sector employment. Cuts in education and training may also have an impact on the quality of human capital in both the public and private sectors, despite the fact that the recent crisis has shown the value of education as employees with better skills and training are more likely to maintain their jobs and incomes.

Chapter 4: Croatia: Public sector adaptation and its impact on working conditions

Vojmir Franičević and Teo Matković

Subjects: economics and finance, labour economics, public sector economics, social policy and sociology, economics of social policy, labour policy


Croatia’s public sector is the focus of public debate and confrontation. Two arguments dominate public debate: first, there is an overgrown but inefficient state (see Jafarov and Gunnarsson 2008; Ba_un et al. 2011); second, there is over employment in the public sector, coupled with advantages over private sector workers with regard to working conditions. The fact that the public sector is highly vulnerable, but hard to reform became clear with the recession starting in 2008. So far, however, stability has prevailed in the public sector, with modest employment adjustments, minor changes in working conditions and wage freeze but no major cuts. This outcome is due primarily to the particular political and social context, and to a lesser extent to the prevailing economic conditions (a stable banking system and relatively low fiscal deficit at the start of the recession, allowing for public debt increase). However, with worsening economic performance (including Croatia’s main trading partners) in 2012, after zero growth in 2011, stability and moderate adjustments will be much harder to sustain. This chapter considers only general government sector employment until June 2012.

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