Regional Transfer Multipliers

Raphael Corbi, Elias Papaioannou and Paolo Surico

The Review of Economic Studies, 2019, vol. 86, issue 5, 1901-1934

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 labour 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: 2019
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Citations: View citations in EconPapers (30)

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Working Paper: Regional Transfer Multipliers (2018)
Working Paper: Regional Transfer Multipliers (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:oup:restud:v:86:y:2019:i:5:p:1901-1934.

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