In both cases, the result is higher public revenues through tax base expansion. However, reforms that raise growth mainly through productivity gains will also increase public spending insofar as public and private sector wages grow more or less in parallel, and that social transfers are set as a proportion of income (e.g. replacement rates as in the case of retirement or unemployment benefits). The net induced effect on the budget is likely to be moderate, except perhaps when efficiency gains are achieved directly in public-sector activities. In such a case, both the wage and non-wage components of public-sector spending fall as a share of GDP, in addition to the potential reduction in social transfers, such as unemployment or retirement benefits.