Numerous studies have examined the effect of local fiscal policy on business activity. Few have emphasised local public services and fewer still have examined the effect of local fiscal policy on the composition of business activity. Using newly derived estimates of regional public...

We empirically examine the relationship between public capital and municipal employment levels and changes using a sample of 48 large US cities during the 1970-80 period. We find greater stocks of public capital are associated with a higher demand for and supply of municipal workers. Holding all...