The Regional Distribution of Public Employment: Theory and Evidence.

Mardi | 2010-03-09

S. G. KESSING – Chiara STROZZI – Camélia TURCU

The regional distribution of public employment is affected bythe role of public employment for inter-regional redistribution.We provide a theoretical framework that highlights the logic ofsuch policies and analyze the empirical evidence. Our empiricalstudy considers the regional distribution of public employmentusing regional data from 19 European countries. Using OLS aswell as IV estimations, we find significant results that public employmentis higher in regions that are poor relative to the nationalaverage. Moreover, the extent of such regional differences in publicemployment between high and low productivity regions can berelated to other structural aspects of the economy.