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Can national infrastructure spending reduce local unemployment? Evidence from an Australian roads program

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  • Leigh, Andrew
  • Neill, Christine

Abstract

We examine the effect of a federally-funded local infrastructure spending program on local unemployment rates. To address the likely funding endogeneity problem, we exploit variation in spending due to pork-barreling, and find that higher government expenditure on roads substantially reduces local unemployment.

Suggested Citation

  • Leigh, Andrew & Neill, Christine, 2011. "Can national infrastructure spending reduce local unemployment? Evidence from an Australian roads program," Economics Letters, Elsevier, vol. 113(2), pages 150-153.
  • Handle: RePEc:eee:ecolet:v:113:y:2011:i:2:p:150-153
    DOI: 10.1016/j.econlet.2011.05.037
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    References listed on IDEAS

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    1. Andrew Leigh, 2008. "Bringing home the bacon: an empirical analysis of the extent and effects of pork-barreling in Australian politics," Public Choice, Springer, vol. 137(1), pages 279-299, October.
    2. Levitt, Steven D & Poterba, James M, 1999. "Congressional Distributive Politics and State Economic Performance," Public Choice, Springer, vol. 99(1-2), pages 185-216, April.
    3. Peter Kenyon, 1997. "Infrastructure Spending and Unemployment: Government Responsibility for Growth and Jobs," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 30(4), pages 421-432.
    4. Kevin Milligan & Michael Smart, 2005. "Regional Grants as Pork Barrel Politics," CESifo Working Paper Series 1453, CESifo Group Munich.
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    Citations

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    Cited by:

    1. repec:taf:pocoec:v:28:y:2016:i:4:p:487-519 is not listed on IDEAS
    2. Sylvain Leduc & Daniel Wilson, 2013. "Roads to Prosperity or Bridges to Nowhere? Theory and Evidence on the Impact of Public Infrastructure Investment," NBER Macroeconomics Annual, University of Chicago Press, vol. 27(1), pages 89-142.
    3. Piotr Ciżkowicz & Michał Kowalczuk & Andrzej Rzońca, 2016. "Heterogeneous determinants of local unemployment in Poland," Post-Communist Economies, Taylor & Francis Journals, vol. 28(4), pages 487-519, October.
    4. Monica Nagpal & Michael A. Kortt & Brian Dollery, 2013. "Bang for the Buck? An Evaluation of the Roads to Recovery Program," Economic Papers, The Economic Society of Australia, vol. 32(2), pages 239-248, June.
    5. Sylvain Leduc & Daniel J. Wilson, 2012. "Should transportation spending be included in a stimulus program? a review of the literature," Working Paper Series 2012-15, Federal Reserve Bank of San Francisco.
    6. Darrouzet-Nardi, Amelia & Masters, William, 2015. "Nutrition smoothing: Can access to towns and cities protect children against poor health conditions at birth?," 2015 Conference, August 9-14, 2015, Milan, Italy 211558, International Association of Agricultural Economists.
    7. Candra Fajri Ananda, 2017. "Does Government Quality Spending can reduce Poverty? A Case in East Java Province," GATR Journals gjbssr458, Global Academy of Training and Research (GATR) Enterprise.
    8. Mahalia Jackman, 2014. "A Note on the Labor Market Effects of Remittances in Latin American and Caribbean Countries: Do Thresholds Exist?," The Developing Economies, Institute of Developing Economies, vol. 52(1), pages 52-67, March.

    More about this item

    Keywords

    Fiscal policy; Unemployment; Partisanship;

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures

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