Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/265189 
Year of Publication: 
2022
Series/Report no.: 
Discussion paper No. 151
Publisher: 
Aboa Centre for Economics (ACE), Turku
Abstract: 
In this paper we examine how Finnish municipalities' expenditures depend on the share of citizens with foreign background out of the total population. Empirical analyses make use of Finnish panel data from 295 municipalities and 202 migrant nationalities for the period 1987- 2018. It turns out that the share of foreign population tends to increase per capita expenditures up to the point where the respective semi-elasticity is about one. The result seems robust in terms of different control variables, subsamples of the data and estimation techniques. Sizeable differences between different nationalities could, however, be detected. Thus, we cannot assume that the use of public services is neutral in terms of demographic changes and that should be considered when making assessments on overall fiscal effects of migration.
Subjects: 
government expenditures
migration
local government
JEL: 
H24
H31
H42
H71
J15
J61
Document Type: 
Working Paper

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