Regional transfer multipliers

Subject

Economics

Publishing details

CEPR Discussion Paper

Authors / Editors

Corbi R; Papaioannou E; Surico P

Biographies

Publication Year

2018

Abstract

A series of discontinuities in the allocation mechanism of federal transfers to municipal governments in Brazil allow us to identify the causal effect of public spending on local labor markets, using a 'fuzzy' Regression Discontinuity Design (RDD). Our estimates imply a cost per job of about 8,000 US dollars per year and a local income multiplier around two. The effect comes mostly from employment in services and is more pronounced among less financially developed municipalities.

Keywords

'Fuzzy' RD; Employment; Government spending; Natural Experiment; Wages

Series Number

DP13304

Series

CEPR Discussion Paper