Regional Transfer Multipliers

Raphael Corbi ^[1] ; Elias Papaioannou ^[2] ; Paolo Surico ^[2]
1. [1] Universidade de São Paulo
  
  Universidade de São Paulo
  
  Brasil
2. [2] London Business School
  
  London Business School
  
  Reino Unido
Localización: Review of economic studies, ISSN 0034-6527, Vol. 86, Nº 5, 2019, págs. 1901-1934
Idioma: inglés
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Resumen
- A series of discontinuities in the allocation mechanism of federal transfers to municipal governments in Brazil allow us to identify the causal effect of public spending on local labour markets, using a “fuzzy” Regression Discontinuity Design (RDD). Our estimates imply a cost per job of about 8,000 US dollars per year and a local income multiplier around two. The effect comes mostly from employment in services and is more pronounced among less financially developed municipalities.