The study looked at how centralizing wage bargaining affects the impact of public job creation on the job market. When wages are set at the firm level, public jobs can replace private jobs due to higher wage pressure. This leads to tax increases, reducing the value of employment. However, in countries with centralized wage setting, public job creation does not lead to higher wages or job losses. Empirical evidence from 11 OECD countries between 1960-1995 supports this, showing that the crowding-out effect only occurs in countries with decentralized wage setting.