[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/3516.html
   My bibliography  Save this paper

Municipal Labor Demand in the Presence of Uncertainty: An Econometric Approach

Author

Listed:
  • Douglas Holtz-Eakin
  • Harvey S. Rosen
Abstract
We specify a modem of municipal labor demand when resource flows available to the municipality are not known with certainty. The model allows us to test the hypothesis that employment decisions are rational in the sense that they incorporate all available information at the time that the decisions are made. We find that for our sample of communities, on the whole one cannot reject the hypothesis that labor demand is consistent with intertemporal utility maximization under uncertainty. However, small and large communities exhibit different behavior. The employment decisions of small communities are consistent with the model, while those of large communities are not.

Suggested Citation

  • Douglas Holtz-Eakin & Harvey S. Rosen, 1990. "Municipal Labor Demand in the Presence of Uncertainty: An Econometric Approach," NBER Working Papers 3516, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:3516
    Note: PE
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w3516.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Hall, Robert E, 1978. "Stochastic Implications of the Life Cycle-Permanent Income Hypothesis: Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 86(6), pages 971-987, December.
    2. Zeldes, Stephen P, 1989. "Consumption and Liquidity Constraints: An Empirical Investigation," Journal of Political Economy, University of Chicago Press, vol. 97(2), pages 305-346, April.
    3. Feenberg, Daniel R, et al, 1989. "Testing the Rationality of State Revenue Forecasts," The Review of Economics and Statistics, MIT Press, vol. 71(2), pages 300-308, May.
    4. Richard B. Freeman, 1987. "How Do Public Sector Wages and Employment Respond to Economic Conditions?," NBER Chapters, in: Public Sector Payrolls, pages 183-216, National Bureau of Economic Research, Inc.
    5. Holtz-Eakin, Douglas & Newey, Whitney & Rosen, Harvey S, 1988. "Estimating Vector Autoregressions with Panel Data," Econometrica, Econometric Society, vol. 56(6), pages 1371-1395, November.
    6. Holtz-Eakin, Douglas & Rosen, Harvey S., 1989. "The `rationality' of municipal capital spending : Evidence from New Jersey," Regional Science and Urban Economics, Elsevier, vol. 19(3), pages 517-536, August.
    7. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-838, May.
    8. Hulten, Charles R, 1984. "Productivity Change in State and Local Governments," The Review of Economics and Statistics, MIT Press, vol. 66(2), pages 256-266, May.
    9. Sargent, Thomas J, 1978. "Estimation of Dynamic Labor Demand Schedules under Rational Expectations," Journal of Political Economy, University of Chicago Press, vol. 86(6), pages 1009-1044, December.
    10. Joseph Tracy, 1988. "Comparisons Between Public and Private Sector Union Wage Differentials: Does the Legal Environment Matter?," NBER Working Papers 2755, National Bureau of Economic Research, Inc.
    11. Poterba, James M & Rotemberg, Julio J, 1990. "Inflation and Taxation with Optimizing Governments," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 22(1), pages 1-18, February.
    12. Topel, Robert H, 1982. "Inventories, Layoffs, and the Short-Run Demand for Labor," American Economic Review, American Economic Association, vol. 72(4), pages 769-787, September.
    13. Ehrenberg, Ronald G. & Schwarz, Joshua L., 1987. "Public-sector labor markets," Handbook of Labor Economics, in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 2, chapter 22, pages 1219-1260, Elsevier.
    14. Joseph Gyourko & Joseph Tracy, 1989. "Public Sector Bargaining and the Local Budgetary Process," NBER Working Papers 2915, National Bureau of Economic Research, Inc.
    15. Mankiw, N. Gregory, 1987. "The optimal collection of seigniorage : Theory and evidence," Journal of Monetary Economics, Elsevier, vol. 20(2), pages 327-341, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Douglas Holtz-Eakin & Harvey S. Rosen, 1989. "Municipal Construction Spending: An Empirical Examination," NBER Working Papers 2989, National Bureau of Economic Research, Inc.
    2. Antti Moisio, 2001. "On Local Government Spending and Taxation Behaviour - Effect of population size and economic condition," ERSA conference papers ersa01p170, European Regional Science Association.
    3. Gregory, Robert G. & Borland, Jeff, 1999. "Recent developments in public sector labor markets," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 53, pages 3573-3630, Elsevier.
    4. Moisio, Antti, 2002. "Essays on Finnish Municipal Finance and Intergovernmental Grants," Research Reports 93, VATT Institute for Economic Research.
    5. Antti Moisio, 2001. "On Local Government Spending and Taxation Behaviour - effect of population size and economic condition," Discussion Papers 257, Government Institute for Economic Research Finland (VATT).
    6. repec:eee:labchp:v:3:y:1999:i:pc:p:3573-3630 is not listed on IDEAS
    7. Alessandro Federici & Pierluigi Montalbano, 2012. "Macroeconomic volatility, consumption behaviour and welfare: A cross-country analysis," Working Paper Series 3612, Department of Economics, University of Sussex Business School.
    8. Yoshitsugu Kitazawa & Makoto Ohta, 2005. "PIH and ROT alternative in view of the intertemporal non-separability of preferences: empirical findings from a Japanese panel data," Discussion Papers 25, Kyushu Sangyo University, Faculty of Economics.
    9. Holtz-Eakin Douglas & Rosen Harvey S. & Tilly Schuyler, 1994. "Intertemporal Analysis of State and Local Government Spending: Theory and Tests," Journal of Urban Economics, Elsevier, vol. 35(2), pages 159-174, March.
    10. Lars-Erik Borge & Per Tovmo, 2009. "Myopic or Constrained by Balanced-Budget Rules? The Intertemporal Spending Behavior of Norwegian Local Governments," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 65(2), pages 200-219, June.
    11. Abdul Jalil, Ahmad Zafarullah & Abdul Karim, Noor Al-Huda, 2008. "Constraining the spending behavior of subnational governments through borrowing limitation: The case of Malaysia," MPRA Paper 25234, University Library of Munich, Germany.
    12. Manuel Arellano & Olympia Bover, 1990. "La econometría de datos de panel," Investigaciones Economicas, Fundación SEPI, vol. 14(1), pages 3-45, January.
    13. Bergström, Pål & Dahlberg, Matz & Johansson, Eva, 1998. "Municipal labour demand," Working Paper Series 1998:1, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    14. Bergstrom, P. & Dahlberg, M. & Johansson, E., 1998. "Municipal Labour Demand. Sweden 1988-1995," Papers 1998:24, Uppsala - Working Paper Series.
    15. Asif Tariq & Aadil Amin & Masroor Ahmad, 2024. "Deciphering the non-linear nexus between government size and inflation in MENA countries: an application of dynamic-panel threshold model," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 13(1), pages 1-20, December.
    16. Dahlberg, Matz & Lindstrom, Tomas, 1998. "Are Local Governments Governed by Forward Looking Decision Makers?: An Investigation of Spending Patterns in Swedish Municipalities," Journal of Urban Economics, Elsevier, vol. 44(2), pages 254-271, September.
    17. Konstantinos Drakos, 2002. "Myopia, Liquidity Constraints, and Aggregate Consumption: The Case of Greece," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 27(1), pages 97-105, June.
    18. Liviatan, Nissan & Frish, Roni, 2006. "Interest on reserves and inflation," Journal of Development Economics, Elsevier, vol. 80(1), pages 269-274, June.
    19. David F. Hendry, 2013. "Econometric Modelling: The ‘Consumption Function’ In Retrospect," Scottish Journal of Political Economy, Scottish Economic Society, vol. 60(5), pages 495-522, November.
    20. Elmendorf, Douglas W. & Gregory Mankiw, N., 1999. "Government debt," Handbook of Macroeconomics, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 25, pages 1615-1669, Elsevier.
    21. Barbara CAVALLETTI & Corrado LAGAZIO & Daniela VANDONE, 2008. "Il credito al consumo in Italia: benessere economico o fragilita’ finanziaria?," Departmental Working Papers 2008-24, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:3516. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.