Consider a union of atomistic member states, each faced with idiosyncratic business-cycle shocks. Private cross-border risk-sharing is limited, giving a role to a federal unemployment-based transfer scheme. Member states control local labor-market policies, giving rise to a trade-off between...

Theory suggests that relations between authorities affect implementation. This article studies the link between central and local government agencies in the Swedish labour market sector. The analysis is based on new quantitative data. The results indicate that central and local government...