This paper studies the effects of local public policy on the distribution of pre-tax income from employment in the Swedish municipalities by estimating an income shares model. Three categories of local public spending are recognized; social expenditures, primary and secondary education expenditures and recreational expenditures. It is found that social expenditures affect the within-municipality distribution of income, whereas no effects can be found for education and recreation. For social expenditures, the effect is to concentrate a larger portion of total income among the middle income groups, and to decrease the portion of total income from high income earners and low income earners. This evidence is consistent with the view that local public expenditures may affect the composition of the local population.
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Paper provided by Umeå University, Department of Economics in its series Umeå Economic Studies with number
515.
Length: 15 pages Date of creation: 30 Sep 1999 Date of revision: Handle: RePEc:hhs:umnees:0515
Contact details of provider: Postal: Department of Economics, Umeå University, S-901 87 Umeå, Sweden Phone: 090 - 786 61 42 Fax: 090 - 77 23 02 Email: Web page: http://www.econ.umu.se/ More information through EDIRC
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Find related papers by JEL classification: D33 - Microeconomics - - Distribution - - - Factor Income Distribution H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
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