Municipal Labour Demand - Sweden 1988 - 1995
AbstractIn this paper we investigate the determinants of municipal labour demand in Sweden 1988-1995. Utilising a major grant reform in 1993, through which a switch from mainly targeted to mainly general central government grants occurred, we are able to identify which type of grants that have the largest effects on municipal employment. We find a larger municipal employment elasticity with respect to grants before the reform, implying that the more freedom given to the municipalities, the less they seem inclined to spend on municipal employment. We further find (i) a short run wage elasticity of approximately -0.5 and a long run ditto of approximately -0.9, (ii) a quite sluggish adjustment process: only 60% of the desired change in municipal employment is implemented in the first year, (iii) that the demographic structure is an important determinant of municipal employment, and (iv) that the behavioural pattern is different in "socialist" municipalities.
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Bibliographic InfoPaper provided by Uppsala University, Department of Economics in its series Working Paper Series with number 1998:24.
Length: 28 pages
Date of creation: 15 Nov 1998
Date of revision:
Publication status: Published in Labour Economics, 2004, pages 315-334.
Contact details of provider:
Postal: Department of Economics, Uppsala University, P. O. Box 513, SE-751 20 Uppsala, Sweden
Phone: + 46 18 471 25 00
Fax: + 46 18 471 14 78
Web page: http://www.nek.uu.se/
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Municipal labour demand; Panel data; Median voter model; Sluggishness;
Other versions of this item:
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
- H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
- J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
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