The Hamilton Project examines the short- and long-term ramifications of declines in public-sector employment since the end of the Great Recession. Government employment has decreased by over 580,000 jobs—the largest decrease in any sector since July 2009. In the short term, these reductions add workers directly to the unemployment rolls and translate into fewer paychecks and decreased consumption. If the share of government employment had stayed at the 2001–2007 average, employment would be 1.7 million jobs higher. In the longer term, it is harder to know the exact impacts of deep cuts in government employment. However, sound evidence exists on the returns to education and the impacts of larger class sizes—due to reductions in public school teachers—on the future earnings of children. The estimated $49.3 billion in foregone earnings resulting from recent teacher cuts translates into approximately $1,000 in future wage losses for each public school student in the United States. Read the full piece here.
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