Government size and unemployment:evidence from developing countries

Horst Feldmann

Journal of Developing Areas, 2009, vol. 43, issue 1, 315-330

Abstract: Using data from 58 countries and the period 1980 to 2003, this paper analyzes how the size of government affects unemployment in developing countries. According to the regression results, a large government sector is likely to increase unemployment. A large share of government consumption in total consumption and a large share of transfers and subsidies in GDP most clearly appear to have a detrimental effect. By contrast, we do not find evidence that dominant state-owned enterprises and a large share of public investment in total investment affect unemployment, neither for bad nor for good. The results are robust to variations in specification and estimation method.

Keywords: public expenditure; size of government; taxation; unemployment (search for similar items in EconPapers)
JEL-codes: E24 H11 H24 H25 H50 J64 (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:jda:journl:vol.43:year:2009:issue1:pp:315-330

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