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Municipal Labour Demand - Sweden 1988 - 1995

Author

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  • Bergström, Pål

    (Trade and Capital Markets)

  • Dahlberg, Matz

    (Department of Economics)

  • Johansson, Eva

    (Department of Economics)

Abstract

In this paper we investigate the determinants of municipal labour demand in Sweden 1988-1995. Utilising a major grant reform in 1993, through which a switch from mainly targeted to mainly general central government grants occurred, we are able to identify which type of grants that have the largest effects on municipal employment. We find a larger municipal employment elasticity with respect to grants before the reform, implying that the more freedom given to the municipalities, the less they seem inclined to spend on municipal employment. We further find (i) a short run wage elasticity of approximately -0.5 and a long run ditto of approximately -0.9, (ii) a quite sluggish adjustment process: only 60% of the desired change in municipal employment is implemented in the first year, (iii) that the demographic structure is an important determinant of municipal employment, and (iv) that the behavioural pattern is different in "socialist" municipalities.

Suggested Citation

  • Bergström, Pål & Dahlberg, Matz & Johansson, Eva, 1998. "Municipal Labour Demand - Sweden 1988 - 1995," Working Paper Series 1998:24, Uppsala University, Department of Economics.
    • Handle: RePEc:hhs:uunewp:1998_024
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    Cited by:

    1. Ahlin, Åsa & Johansson, Eva, 2000. "Demand for Local Public Schooling: Another Brick in the Wall," Working Paper Series 2000:12, Uppsala University, Department of Economics.
    2. Åsa Ahlin & Eva Johansson, 2001. "Individual Demand for Local Public Schooling: Evidence from Swedish Survey Data," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 8(4), pages 331-351, August.
    3. Bergstrom, Pal & Dahlberg, Matz & Mork, Eva, 2004. "The effects of grants and wages on municipal labour demand," Labour Economics, Elsevier, vol. 11(3), pages 315-334, June.

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    More about this item

    Keywords

    Municipal labour demand; Panel data; Median voter model; Sluggishness;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets

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