Regional Transfer Multipliers
125 Pages Posted: 12 Nov 2018
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: Suggested Citation
Raphael B. Corbi (Contact Author)
University of Sao Paulo ( email )
Rua Carlos Del Prete, 265, apt
265, apto101
Sao Paulo, SP 09710-230
Brazil
09710230 (Fax)