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General revenue sharing and public sector unions

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  • Feiveson, Laura

Abstract

In this paper, I find that in the context of a large intergovernmental general revenue sharing program implemented from 1972 to 1986, cities increased expenditures one-for-one with federal grants, which is suggestive of a large flypaper effect. Furthermore, I find that cities in states with pro-union collective bargaining laws spent more than half of the transfers on increased wages, while cities in states without such laws spent a greater fraction on increased government services. These latter findings suggest that public sector unions play an important role in determining the usage and impact of intergovernmental grants.

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  • Feiveson, Laura, 2015. "General revenue sharing and public sector unions," Journal of Public Economics, Elsevier, vol. 125(C), pages 28-45.
    • Handle: RePEc:eee:pubeco:v:125:y:2015:i:c:p:28-45
    DOI: 10.1016/j.jpubeco.2015.03.004
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