Regional Transfer Multipliers

125 Pages Posted: 12 Nov 2018

See all articles by Raphael B. Corbi

Raphael B. Corbi

London Business School

Elias Papaioannou

London Business School

Paolo Surico

London Business School - Department of Economics; Centre for Economic Policy Research (CEPR)

Date Written: November 2018

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 labor 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: 'fuzzy' RD, employment, government spending, Natural Experiment, wages

JEL Classification: C26, E62, H72

Suggested Citation

Corbi, Raphael B. and Papaioannou, Elias and Surico, Paolo, Regional Transfer Multipliers (November 2018). CEPR Discussion Paper No. DP13304. Available at SSRN: https://ssrn.com/abstract=3283008

Raphael B. Corbi (Contact Author)

London Business School ( email )

Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom

Elias Papaioannou

London Business School ( email )

Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom

Paolo Surico

London Business School - Department of Economics ( email )

Sussex Place
Regent's Park
London NW1 4SA
United Kingdom

HOME PAGE: http://sites.google.com/site/paolosurico

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

HOME PAGE: http://sites.google.com/site/paolosurico

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