Creación de empleo e impuestos municipales: un estudio empírico de las externalidades fiscales

This paper studies the effects on job creation of the main local tax rates and of expenditure in some local services. With this purpose we estimate a job growth equation using a panel with more than 100 local governments during 8 years (1992-99). With the aim of bringing evidence about local fiscal externalities, we also include neighbours’ fiscal variables in the equation. The results suggest that tax rates set by the local government have a negative effect on job creation in its jurisdiction, but productive local expenditure and neighbours’ tax rates have a positive effect.