The public sector employs the most people in both developed and developing nations. Behar and Mok estimate that the government makes up 18% of employment in OECD nations. The hiring process in the public sector also favours qualified and experienced workers. Giordano claims that in countries in the Euro Area, the public sector has an average share of workers with a postsecondary degree that is 2.6 times higher than the private sector. According to Mizala, the public sector in Latin America requires an average of 3 to 6 more years of schooling than the private sector. According to Fontain, the public sector employs a much higher proportion of elderly people than it does younger workers, with 22% in Spain and the United States and 25% in France and the United Kingdom, respectively. These facts imply that employment in the public sector has a significant impact on the functioning of the labour market as a whole, as the hiring of skilled and more experienced workers into the public sector affects the decisions of businesses to create openings and employees in the private sector to look for jobs. In this study, we examine how hiring practises in the public sector affect employment in the private sector and the volatility of the labour market using a public-sector version of the Mortensen-Pissarides search and matching model that incorporates the stylised data mentioned earlier. A cross-country relationship has been found between the proportion of the labour force employed by the public sector and labour market volatility from 1980 to 2018 for a sizable set of emerging and advanced countries. In both situations, volatility is evaluated using the average standard deviation, and the solid line provides the best linear fit. As the percentage of public sector employment rises, so does the standard deviation of both private employment and the unemployment rate. The rise in productivity of an individual is influenced by two variables. As pre-market abilities gained through schooling, agents' abilities are first and foremost heterogeneous. The second element is known as human capital or knowledge, and it is acquired through a process of learning-by-doing. By assuming that worker productivity varies over time in accordance with laws of motion that depend on whether the worker is employed or not, we build on the work of Ljungqvist and Sargent. In general, employed agents' productivity increases while unemployed agents' output declines. Additionally, the government hires civil employees to produce a benefit for the general populace that enhances personal usefulness. By advertising job openings for agents with a particular level of education and human capital, private businesses and the government can focus their recruitment efforts. In the public sector, employment creation is exogenous and adjusted to reflect the fact that the government hires more people with higher levels of education than is typical. The calibrated model is then used to examine how governmental employment policies affect the creation of private sector jobs and the volatility of the labour market. We'll look at the experiment below to illustrate it. Starting with the economy at its steady state, we compute the impulse response function for private sector employment in response to an unexpected 1% drop in aggregate productivity. The experiment is then performed in a counterfactual economy where, while maintaining a constant government size, employment creation in the public sector is less biassed toward talented and experienced actors. We find that the employment loss in the counterfactual economy is around 35% more than in the benchmark economy. We demonstrate in our model that human capital accumulation is the primary factor causing differences in employment responses. By reducing the expected return on a match for private sector companies, the government hiring policy has an impact on private sector employment and aggregate variations. It is believed that hiring people is an investment activity, with expenses paid up front and benefits accumulating over time as employees' productivity increases. This is due to the fact that making a match has much more lasting advantages than building up human capital through employment.