 Capital and Labor Mobility and the Size of Sub-national Governments: Evidence from a Panel of Mexican StatesRene Cabral () No 231, CID Working Papers from Center for International Development at Harvard University Abstract: We examine in this paper the relation between government size and capital and labor openness employing a panel of the 32 Mexican states over the period 1996-2006. Making use of two alternative measures of capital and labor openness and employing several alternative econometric specifications, we first find systematic positive effects of our openness measures on the size of the states’ total government spending. Thereafter, we break down total government expenditure and focus on three subcategories of spending associated with social welfare: education, health and poverty alleviation programs. We find that FDI flows, our proxy for capital openness, are not significant determinants of the state’s social spending, but labor openness, in the form of international migration, has a significant and even greater impact on some of the aforementioned categories than on total spending. Keywords: Capital Inflows; Migration; Globalization; Government Size; Panel Data Methods; Mexico. (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:cid:wpfacu:231 Access Statistics for this paper More papers in CID Working Papers from Center for International Development at Harvard University 79 John F. Kennedy Street. Contact information at EDIRC. |
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