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Government employment and local multipliers in Greek municipalities

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  • Stelios Roupakias

    (Aristotle University of Thessaloniki)

Abstract

This paper studies the impact of the remarkable increase in the share of public employment on the private sector across 156 Greek municipalities using Census data (1981–2011). To capture causal effects, we implement an instrumental variables approach, based on a shift-share design. We find that an additional job in the public sector creates nearly 0.7 jobs in the non-tradable sector (construction and services), whilst no significant effects are detected for the tradable sector (manufacturing). The findings appear to be robust to different estimation strategies, spillovers from contiguous regions, and to the inclusion of confounding factors. Importantly, we document that the most recent decline in the number of public servants did not significantly affect the private sector.

Suggested Citation

  • Stelios Roupakias, 2024. "Government employment and local multipliers in Greek municipalities," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 72(1), pages 195-221, January.
    • Handle: RePEc:spr:anresc:v:72:y:2024:i:1:d:10.1007_s00168-022-01195-x
    DOI: 10.1007/s00168-022-01195-x
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    More about this item

    JEL classification:

    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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