Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/282558 
Year of Publication: 
2023
Series/Report no.: 
CESifo Working Paper No. 10870
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
We exploit a series of public-sector entity relocations in South Korea as an exogenous source of variation in public sector employment to estimate the local employment multiplier. We find that the introduction of one public sector employment position increases private sector employment by one unit, primarily driven by the service sector. Consistent with existing literature, we document that the effect of public employment on private employment is highly localized. In addition to changes in private employment, we also discover that the relocations led to a positive net influx of residents into the treated neighborhoods; this effect is also localized. Lastly, by estimating the local employment multiplier for each relocation site, we document the heterogeneity of the local employment multiplier and provide suggestive evidence that this het-erogeneity is shaped by the local economic environment's capacity to accommodate additional general equilibrium responses.
Subjects: 
employment multiplier
public employment
spatial spillover
migration
heterogeneity
JEL: 
H31
J45
J61
R11
R23
R58
Document Type: 
Working Paper
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