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

  • Leigh, Andrew
  • Neill, Christine

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.

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Article provided by Elsevier in its journal Economics Letters.

Volume (Year): 113 (2011)
Issue (Month): 2 ()
Pages: 150-153

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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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  1. Kevin Milligan & Michael Smart, 2005. "Regional Grants as Pork Barrel Politics," CESifo Working Paper Series 1453, CESifo Group Munich.
  2. 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.
  3. Steven D. Levitt & James M. Poterba, 1994. "Congressional Distributive Politics and State Economic Performance," NBER Working Papers 4721, National Bureau of Economic Research, Inc.
  4. 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.
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