Voting for Jobs: Policy Persistence and Unemployment

Gilles Saint-Paul

No 1428, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper studies, in a model with unemployment, how labour market status affects the preferences for public spending, in the form of a public good or subsidies. It then derives the implications for the dynamics of government expenditures under the hypothesis of majority voting. These will exhibit positive persistence if the employed are marginally more powerful than the unemployed, and negative persistence if the unemployed are marginally more powerful. Under a uniform distribution of tastes for the public good, there is no persistence. The preferences of the unemployed may be non-single-peaked, so that high unemployment may destroy the existence of a voting equilibrium.

Keywords: Fiscal Policy; Job Creation; Political Economy; Public Spending; Unemployment; Voting (search for similar items in EconPapers)
JEL-codes: E62 H2 H5 J6 (search for similar items in EconPapers)
Date: 1996-06
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Citations: View citations in EconPapers (6)

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Working Paper: Voting for Jobs: Policy Persistence and Unemployment (1996)
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