Template-type: ReDIF-Paper 1.0
Author-Name: Jorge Martinez-Vazquez 
Author-Email: jorgemartinez@gsu.edu 
Author-Homepage: https://icepp.gsu.edu/profile/jorge-martinez-vazquez/
Author-Workplace-Name:  International Studies Program. Andrew Young School of Policy Studies, Georgia State University
Author-Workplace-Homepage:  https://icepp.gsu.edu/
Author-Name: Ming-Hung Yao
Author-Email: mhyao@thu.edu.tw
Author-Homepage: 
Author-Workplace-Name: Department of Economics, Tunghai University, Taichung, Taiwan
National University of Ireland Galway
Author-Workplace-Homepage: 
Title: Fiscal Decentralization and Public Sector Employment: A Cross-Country Analysis
Abstract: This paper investigates the relationship between public sector employment and fiscal decentralization. 
We develop a theoretical framework modeling the interactions between the central and sub-national executives regarding 
the level of public employment at the central and sub-national government levels. In our empirical work, based on a large 
cross-country dataset, we find that, ceteris paribus, the level of total public sector employees in a country increases 
with its level of fiscal decentralization. Even though central government employment decreases with decentralization, 
this is more than fully offset by the increase in employment at the sub-national level accompanying decentralization. 
Our empirical results also indicate that the relationship between GDP per capita and public sector employment is not 
monotonic but quadratic, that  total public sector employment is higher in unitary countries vis-à-vis federal countries, 
and that public employment increases with the country’s international economic openness.
Keywords: fiscal decentralization; public sector employment; public sector size
Length: 49 pages
Creation-Date: 2009-03-01
File-URL: http://icepp.gsu.edu/files/2015/03/ispwp0903.pdf
File-Format:application/pdf
Handle: RePEc:ays:ispwps:paper0903