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The effect of public sector employment on local labour markets

Faggio, Giulia and Overman, Henry G. (2013) The effect of public sector employment on local labour markets. Journal of Urban Economics, 79 . pp. 91-107. ISSN 0094-1190

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Abstract

This paper considers the impact of public sector employment on local labour markets. Using English data at the Local Authority level for 2003–2007 we find that public sector employment has no identifiable effect on total private sector employment. However, public sector employment does affect the sectoral composition of the private sector. Specifically, each additional public sector job creates 0.5 jobs in the non-tradable sector (construction and services) while crowding out 0.4 jobs in the tradable sector (manufacturing). When using data for a longer time period (1999–2007) we find no multiplier effect for non-tradables, stronger crowding out for tradables and, consistent with this, crowding out for total private sector employment.

Item Type: Article
Official URL: http://www.journals.elsevier.com/journal-of-urban-...
Additional Information: © 2013 Elsevier Inc.
Library of Congress subject classification: H Social Sciences > HD Industries. Land use. Labor
Journal of Economic Literature Classification System: H - Public Economics > H7 - State and Local Government; Intergovernmental Relations > H70 - General
R - Urban, Rural, and Regional Economics > R1 - General Regional Economics > R12 - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade
Sets: Departments > Geography and Environment
Research centres and groups > Spatial Economics Research Centre
Collections > Economists Online
Research centres and groups > Centre for Economic Performance (CEP)
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 30 May 2013 14:23
URL: http://eprints.lse.ac.uk/50482/

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