Heterogeneous Spending, Heterogeneous Multipliers
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Summary:
Do local fiscal multipliers depend on what the government purchases? We find that government purchases of services have larger effects on employment than spending on goods. Industries producing services are more labor-intensive than industries producing goods. This heterogeneity in labor intensity is an important mechanism behind these results. Spending directed toward labor-intensive industries generates stronger increases in employment and labor income relative to spending toward non-labor-intensive industries.
Series:
Working Paper No. 2023/052
Frequency:
regular
English
Publication Date:
March 10, 2023
ISBN/ISSN:
9798400233777/1018-5941
Stock No:
WPIEA2023052
Pages:
50
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