Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/96034
Authors: 
Higgins, Matthew J.
Young, Andrew T.
Levy, Daniel
Year of Publication: 
2008
Series/Report no.: 
Working Papers, Bar-Ilan University, Department of Economics 2008-02
Abstract: 
We use US county level data (3,058 observations) from 1970 to 1998 to explore the relationship between economic growth and the extent of government employment at three levels: federal, state and local. We find that increases in federal, state and local government employments are all negatively associated with economic growth. We find no evidence that government is more efficient at more decentralized levels. While we cannot separate out the productive and redistributive services of government, we document that the county-level income distribution became slightly wider from 1970 to 1998. For those who justify government activities in terms of equity concerns - perhaps even trading off economic growth for equity - the burden falls on them to show that the income distribution would have widened more in the absence of government activities. We conclude that a release of government-employed labor inputs to the private sector would be growth-enhancing.
Subjects: 
Economic Growth
Federal Government
State Government
Local Government
County-Level Data
JEL: 
O40
O11
O18
O51
R11
H50
H70
Document Type: 
Working Paper

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