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Life after public employment retrenchment: evidence from Italian municipalities
[Redistributive public employment]

Author

Listed:
  • Marta Auricchio
  • Emanuele Ciani
  • Alberto Dalmazzo
  • Guido de Blasio

Abstract

We investigate the interaction between public and private employment at the local level. In contrast to previous literature, which has mainly examined public sector expansions, we provide evidence about the impact of downsizing. Using data from Italian municipalities, the IV strategy we adopt here exploits the fact that the contraction in public employment observed between the last two Censuses (2001–2011) was strongly influenced by the decision made by central government, with little reference to local economic conditions. Our results suggest that exogenous reductions in public employment stimulate the growth of private jobs, mostly in tradables. The change in local prices, especially for housing services, represents a relevant channel for the interplay between the tradable and non-tradable sectors.

Suggested Citation

  • Marta Auricchio & Emanuele Ciani & Alberto Dalmazzo & Guido de Blasio, 2020. "Life after public employment retrenchment: evidence from Italian municipalities [Redistributive public employment]," Journal of Economic Geography, Oxford University Press, vol. 20(3), pages 733-782.
    • Handle: RePEc:oup:jecgeo:v:20:y:2020:i:3:p:733-782.
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    File URL: http://hdl.handle.net/10.1093/jeg/lbz013
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    Cited by:

    1. Becker, Sascha O. & Heblich, Stephan & Sturm, Daniel M., 2021. "The impact of public employment: Evidence from Bonn," Journal of Urban Economics, Elsevier, vol. 122(C).

    More about this item

    Keywords

    Local labor markets; public employment;

    JEL classification:

    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - 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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