Redistribution Through Public Employment: The Case of Italy
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Summary:
This paper examines the regional distribution of public employment in Italy and documents two sets of facts. The first is the use of public employment as a subsidy from the North to the less wealthy South. We calculate that about half of the wage bill in the South of Italy can be identified as a subsidy, with both the size of public employment and wage levels used as a redistributive device. The second set of facts concerns the negative effects of subsidized public employment on individuals’ attitudes toward job search, education, and “risk-taking” activities. We conclude that heavy reliance on public employment distorts incentives and discourages the development of market activities in the South.
Series:
Working Paper No. 1999/177
Subject:
Economic sectors Employment Labor Public employment Public sector Wages
English
Publication Date:
December 1, 1999
ISBN/ISSN:
9781451858853/1018-5941
Stock No:
WPIEA1771999
Pages:
44
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