@TechReport{iza:izadps:dp6449,
            	author={Kessing, Sebastian G. and Strozzi, Chiara},
            	title={The Regional Distribution of Public Employment: Theory and Evidence},
            	year={2012},
	month={Mar},
            	institution={Institute of Labor Economics (IZA)},
            	address={Bonn},
            	type={IZA Discussion Paper},
            	number={6449},
            	url={https://www.iza.org/publications/dp6449},
	abstract={We analyze the optimal regional pattern of public employment in an information-constrained second-best redistribution policy showing that regionally differentiated public employment can serve as an expenditure side tagging device, bypassing or relaxing the equity-efficiency trade-off. The optimal pattern exhibits higher levels of public employment in low productivity regions and is more pronounced the higher is the degree of regional inequality within the country. Empirically, using a panel of European regions from 1995-2007, we find evidence that public employment is systematically higher in low productivity regions. The latter effect is stronger in countries with higher levels of regional inequality.},
	keywords={public employment;redistribution;regional inequality;European regions},
            }