The proportion of the labour force working for the government is one indication of how public services are delivered in a country (whether predominantly by government workers or through the private and non-profit sectors as well) and is an important factor determining the costs of service delivery. In countries where a large proportion of the labour force works for government, government employment could also crowd out private sector employment.

The share of government staff employed at sub-central levels is an indicator of the level of decentralisation of public administrations. In general, larger shares of government employees at the sub-central level indicate that more responsibilities are delegated to regional and local governments.

The majority of OECD member countries are experiencing population ageing, with changes occurring at a faster pace in some countries (e.g. Italy) than in others (e.g. Estonia). Ageing is even more marked in the central governments of OECD countries, where the ratio of government workers aged 50 years or older is on average 26% higher than in the total labour force. Indeed, in all but four OECD member countries (Japan, Estonia, Chile and Korea) central government workforces have a higher ratio of workers 50 years or older than in the total labour force. The difference is the most pronounced in Italy and Belgium.

Achieving the most efficient and effective size and allocation of the public service workforce is an ongoing challenge for OECD member countries, where the compensation of government employees represented about 24% of general government expenditures in 2009 (see Indicator 8). Today, this challenge is exacerbated by a confluence of factors which include the fiscal pressures following the economic crisis, but also new public service demands resulting from population ageing and the possibilities offered by information and communications technologies. To face these challenges, careful workforce planning and strategic human resources management reforms help to ensure that governments continue to deliver quality public services while responding to the need to reduce or maintain budgets.