TY  - RPRT
        AU  - Kessing, Sebastian G.
AU  - Strozzi, Chiara
        TI  - The Regional Distribution of Public Employment: Theory and Evidence
        PY  - 2012/Mar/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 6449
        UR  - https://www.iza.org/publications/dp6449
        AB  - 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.
        KW  - public employment
KW  - redistribution
KW  - regional inequality
KW  - European regions
        ER  -