From Neil Irwin in the WaPo:
From July 2008 to January 2013, the sector shed more than 737,000 jobs. Had the jobs merely been maintained, the unemployment rate would be as much has half a percentage point lower.
Pointer from Mark Thoma.
From Mark Perry at AEI:
in the 50 months since June 2009 when the recession ended, more than 6.3 million jobs have been created in the private sector and the employment level today is 5.8% higher than in June 2009. Over that same period, government sector jobs have fallen by 3.3%, and by more than 750,000 jobs.
My guess is that state and local governments have to put relatively more money into Medicaid and into shoring up pension plans, which leaves them less to spend on new workers. Also, do not be so sure that this is macroeconomically important. It could be that if state and local governments had retained workers, then the private sector would not have expanded as much. In any case, the bigger story, numerically, is the drop in the labor force. As Brad Plumer puts it.
If the same percentage of adults were in the workforce today as when Barack Obama took office, the unemployment rate would be 10.8 percent.
In my experience, there are a large number of ZMP workers in the ranks of state and local government employees, so from a productivity standpoint, I wouldn’t expect the loss of such jobs to be all that significant, macroeconomically, either.