The Effect Of Government Size On Economic Growth: Evidence From Gross State Product Data

Garey Durden and Barry Elledge
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Barry Elledge: Appalachian State University

The Review of Regional Studies, 1993, vol. 23, issue 2, 183-190

Abstract: Using newly released data from the Bureau of Economic Analysis, this paper provides empirical estimates of the effect of government employment on gross state product. Cross-sectional data from 1982 are combined with a simple growth model to show that higher levels of government employment generally have a positive and significant effect on gross state product, with state and local employment levels having apparently greater influence. A first-differences variant of the model supports the cross-sectional findings. However, the positive influence of absolute government size may be offset by a negative relationship between GSP growth and the relative size of government.

Date: 1993
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Persistent link: https://EconPapers.repec.org/RePEc:rre:publsh:v23:y:1993:i:2:p:183-190

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