Redistribution Through Public Employment : The Case of Italy

This paper examines the regional distribution of public employment in Italy and documents two sets of facts. The 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, with both the size of public employment and wage levels used as a redistributive device. The second set of facts concerns the negative effects of subsidized public employment on individuals' attitudes toward job search, education, and "risk-taking" activities. We conclude that heavy reliance on public employment distorts incentives and discourages the development of market activities in the South.
Publication date: December 1999
ISBN: 9781451858853
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Labor , Labor , Labor and Industrial Relations , Labor and Industrial Relations , Public Employment , Redistribution of Income , Public Policy and Economic Behavior of Agents , employment , unemployment , work experience , job search

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