Redistribution Through Public Employment; The Case of Italy
This paper examines the regional distribution of public employment in Italy and documents two sets of facts. The first is the use of public employment as a subsidy from the North to the less wealthy South. We calculate that about half of the wage bill in the South of Italy can be identified as a subsidy, with both the size of public employment and wage levels used as a redistributive device. The second set of facts concerns the negative effects of subsidized public employment on individuals’ attitudes toward job search, education, and “risk-taking” activities. We conclude that heavy reliance on public employment distorts incentives and discourages the development of market activities in the South.
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- Alesina, Alberto & Baqir, Reza & Easterly, William, 2000.
"Redistributive Public Employment,"
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- Randall W. Eberts & Timothy J. Gronberg, 1992. "Wagner's hypothesis: a local perspective," Working Paper 9202, Federal Reserve Bank of Cleveland. Full references (including those not matched with items on IDEAS)
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