Redistribution Through Public Employment: The Case of Italy
Alberto Alesina, Stephan Danninger, Massimo Rostagno
NBER Working Paper No. 7387
This paper examines the regional distribution of public employment in Italy. It documents two sets of facts. This 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. Both the size of public employment and the level of wages are used as a redistributive device. The second set of facts concerns the effects of a subsidized public employment on individuals' attitudes toward job search, education, 'risk taking' activities etc. Public employment discourages the development of market activities in the South.
Published: Albert Alesina & Stephan Danninger & Massimo Rostagno, 2001. "Redistribution Through Public Employment: The Case of Italy," IMF Staff Papers, Palgrave Macmillan Journals, vol. 48(3), pages 2.