https://www.elibrary.imf.org/view/journals/001/2023/064/article-A001-en.xml
Finally, we also estimate the dynamic of public wage shocks on private wages and inflation.
We find that public wages tend to drive the wage setting mechanism in the economy in countries where the public sector is relatively large. We also find that both private wages and the price level respond positively to public wage shocks, with significant heterogeneity in the effects, owing to both labor market characteristics and prevailing macroeconomic conditions at the time of the public wage increase. In particular, changes in public wages have larger and more persistent effects on both private wages and inflation in countries with higher unionization, higher bargaining coverage, and in more centralized wage bargaining regimes. They are also larger and more persistent during periods of higher slack in the economy and during periods of higher inflation.