Public employment and regional risk sharingScandinavian Journal of Economics (2004)
AbstractWe provide an empirical analysis of regional risk sharing in Norway over the period 1977–90. The approach of Asdrubali, Sørensen and Yosha (1996) is extended to take public employment into account as a possible shock absorber. The other channels of risk sharing are capital markets and commuting, taxes and transfers, and credit markets. The estimated degree of regional consumption insurance is very high. We cannot reject the hypothesis that there is full interregional risk sharing in the short term. Public employment absorbs up to 25 percent of private sector output shocks in our analyses. Generally, central government insurance against regional shocks is relatively more important, the more permanent the shocks are, and vice versa for market-based risk-sharing channels.
- Public Employment; Risk Sharing; Regional Integration
Citation InformationLars-Erik Borge and Egil Matsen. "Public employment and regional risk sharing" Scandinavian Journal of Economics Vol. 106 Iss. 2 (2004)
Available at: http://works.bepress.com/egil_matsen/6/