Regional Transfer Multipliers

Paolo Surico, Raphael Corbi and Elias Papaioannou

No 13304, CEPR Discussion Papers from Centre for Economic Policy Research

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: Natural experiment; ‘fuzzy’ rd; Government spending; Employment; Wages (search for similar items in EconPapers)
JEL-codes: C26 E62 H72 (search for similar items in EconPapers)
Date: 2018-11
New Economics Papers: this item is included in nep-mac and nep-ure
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Citations: View citations in EconPapers (7)

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Journal Article: Regional Transfer Multipliers (2019)
Working Paper: Regional Transfer Multipliers (2018)
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