The Effects of Fiscal Decentralization on Publicly Provided Services and Labor Markets

Nicola Bianchi, Michela Giorcelli and Enrica Martino

No 17171, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper studies how fiscal decentralization affects local services. It explores a 1993 reform that increased the fiscal autonomy of Italian municipalities by replacing government transfers with revenues from a local property tax. Our identification leverages cross-municipal variation in the degree of decentralization that stems from differences in the average age of buildings caused by bombings during WWII. Decentralization reduced local spending but expanded municipal services, such as nursery schools. These effects are larger in areas with greater political competition. The paper also investigates how the reform affected labor markets. Decentralization increased female labor supply—probably through expanded availability of nursery schools—thereby reducing the gender gap in employment.

Keywords: Fiscal decentralization; Female labor supply; Childcare; Nursery schools; Local property tax (search for similar items in EconPapers)
JEL-codes: H71 H75 H77 I21 J20 (search for similar items in EconPapers)
Date: 2022-04
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP17171 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Journal Article: The Effects of Fiscal Decentralisation on Publicly Provided Services and Labour Markets (2023)
Working Paper: The Effects of Fiscal Decentralization on Publicly Provided Services and Labor Markets (2021)
Working Paper: The Effects of Fiscal Decentralization on Publicly Provided Services and Labor Markets (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:17171

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP17171

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().