Taking off into the wind: Unemployment risk and state-Dependent government spending multipliers.

We propose a model with involuntary unemployment, incomplete markets, and nominal rigidity, in which the effects of government spending are state-dependent. An increase in government purchases raises aggregate demand, tightens the labor market and reduces unemployment. This in turn lowers unemployment risk and thus precautionary saving, leading to a larger response of private consumption than in a model with perfect insurance. The output multiplier is further amplified through a composition effect, as the fraction of high-consumption households in total population increases in response to the spending shock. These features, along with the matching frictions in the labor market, generate significantly larger multipliers in recessions than in expansions. As the pool of job seekers is larger during downturns than during expansions, the concavity of the job-finding probability with respect to market tightness implies that an increase in government spending reduces unemployment risk more in the former case than in the latter, giving rise to countercyclical multipliers.

Government spending, recession, and suicide: evidence from Japan.

BACKGROUNDS: Austerity has been shown to have an adverse influence on people's mental health and suicide rates. Most existing studies have focused on the governments' reactions to a single event, for example, the Great Recession of 2008. METHODS: This study focused on significant changes in fiscal policy between 2001 and 2014 in Japan. The size of expenditures by national and local governments decreased dramatically between 2001 and 2006 under the neoliberal reform and then increased after the global economic crisis and the Great East Japan Earthquake. Using the data from 47 prefectures between 2001 and 2014, we tested whether more spending by the local governments was associated with a lower suicide rate in their jurisdiction. We also investigated whether this relationship was particularly salient during a more severe recession. RESULTS: Our analysis revealed that an increase of 1% in the per capita local government expenditures was associated with a decrease of 0.2% in the suicide rates among males and females aged between 40 and 64 and that this correlation was strengthened as the unemployment rate increased, particularly among males. CONCLUSIONS: Government's reaction to economic crises can either exacerbate or mitigate the negative impact of the economic recession on people's mental health and suicide rates.

The macroeconomic effects of lockdown policies.

A tractable incomplete-market model with endogenous unemployment risk, sticky prices, real wage rigidity and a fiscal side is calibrated to Euro Area countries and used to analyze the macroeconomic effects of lockdown policies. Modeling them as a shock to the extensive margin of labor adjustment - a rise in separations - produces large and persistent negative effects on output, unemployment and welfare, raises precautionary savings and lowers inflation, in line with early evidence about inflation dynamics. Modeling lockdowns as a shock to the intensive margin - a fall in labor utilization - produces small and short-lived macroeconomic and welfare effects, and implies a counterfactual rise in inflation. Conditional on a lockdown (separation) shock, raising public spending or extending UI benefits by large amounts is much more effective in stimulating the economy than during normal times. Quantitatively however, the ability of such policies to flatten the output and unemployment curves remains limited, even though these policies can alleviate a reasonable share of the aggregate welfare losses from the lockdown.

Ideological profiles of US adults and their support for youth mentoring.

Little is known about the influence of political ideology and religiosity on adults' support for youth mentoring as a strategy to address social problems. This study used latent class analysis in a large, national sample of US adults to identify underlying ideological profiles associated with support for mentoring programs. Three latent classes emerged. The attitudes of two classes, Classic Conservatives and Progressives, were consistent with traditional political conservatism and liberalism; the latter endorsed higher support for the theory of mentoring and government spending on mentoring programs. Members of the third class, Religious Outsiders, were highly religious, self-identified as very conservative, and were highly supportive of the theory of mentoring and the use of government funds on mentoring programs. Ad hoc analyses revealed that Religious Outsiders were the most likely to actually participate in mentoring activities. These findings suggest that support for mentoring, while not universal, crosses traditional political lines.

State government public goods spending and citizens' quality of life.

A growing literature across the social sciences uses individuals' self-assessments of their own well-being to evaluate the impact of public policy decisions on citizens' quality of life. To date, however, there has been no rigorous empirical investigation into how government spending specifically on public goods impacts well-being. Using individual-level data on respondents' self-reported happiness and detailed government spending data for the American states for 1976-2006, I find robust evidence that citizens report living happier lives when their state spends more (relative to the size of a state's economy) on providing public goods. As an important spuriousness check, I also show that this relationship does not hold for total government spending or for government spending on programs that are not (strictly speaking) public goods like education and welfare assistance to the poor. Moreover, the statistical relationship between public goods spending and happiness is substantively large and invariant across income, education, gender, and race/ethnicity lines - indicating that spending has broad benefits across society. These findings suggest that public goods spending can have important implications for the well-being of Americans and, more broadly, contribute to the growing literature on how government policy decisions concretely impact the quality of life that citizens experience.

Economic crisis and public attitudes toward science: A study of regional differences in Spain.

Although there is little theory about the effects of economic conditions on public support for science and technology (S&T), some evidence suggests that an economic crisis could produce a decline in support for S&T because of more pressing priorities, such as jobs and social services. But the public may also view S&T as a strategic pathway out of an economic slump. We test these competing hypotheses employing two national surveys from Spain, implemented before (2006) and after (2010) the onset of a severe economic crisis. We find that, in regions hit hardest by the crisis (compared to less-affected regions), trust in the benefits of S&T increased substantially, as did general public interest in S&T. Similarly, residents of the hardest-hit regions were more likely after the crisis to choose S&T (out of a list of policy areas) as a priority for government, and somewhat more likely to express support for increases in government S&T spending. Theoretical and policy implications are discussed.

Local government spending and mental health: Untangling the impacts using a dynamic modelling approach.

This study investigated the impact of local government spending on mental health in England between 2013 and 2019. Guided by the "Health in All Policies" vision, which encourages the integration of health in all decision-making areas, we explored how healthcare and multiple nonmedical budgeting decisions related to population mental health. We used random curve general cross-lagged modelling to dynamically partition effects into the short-run (from t to t + 1) and long-run (from t to t + 2) impacts, account for unobserved area-level heterogeneity and reverse causality from health outcomes to financial investments, and comprehensive modelling of budget items as an interconnected system. Our findings revealed that spending in adult social care, healthcare, and law & order predicted long-term mental health gains (0.004-0.081 SDs increase for each additional 10% in expenditure). However, these sectors exhibited negative short-term impulses (0.012-0.077 SDs decrease for each additional 10% in expenditure), markedly offsetting the long-term gains. In turn, infrastructural and environmental spending related to short-run mental health gains (0.005-0.031 SDs increase for each additional 10% in expenditure), while the long-run effects were predominantly negative (0.005-0.028 SDs decrease for each additional 10% in expenditure). The frequent occurrence of short-run and long-run negative links suggested that government resources may not be effectively reaching the areas that are most in need. In the short-term, negative effects could also imply temporary disruptions to service delivery largely uncompensated by later mental health improvements. Nonetheless, some non-health spending policies, such as law & order and infrastructure, can be related to long-lasting positive mental health impacts.

Can aging population affect economic growth through the channel of government spending?

The demographic transition toward an aging society is a global phenomenon. An increase in the aging population directly challenges the government positions and public expenditures as it directly affects a country's aggregate demand and, thus, the country's income level. This paper investigates the impact of an aging population on the size of government spending. Using an updated dataset of 87 countries from 1996 to 2017, we study the aggregate level and each composition of government expenditures. Furthermore, we investigate whether the aging population influences the allocation of government spending toward different categories and economic growth changes. The paper uses the generalized method of moment (GMM) model for the dynamic panel data analysis to address the endogeneity problem. Our main findings suggest that an increase in the old-age population significantly induces higher aggregate government spending but only in developed countries and in particular on the spending in the social protection and environment categories. However, the aging society leads to lower government expenditure on education. Other critical findings reveal that changes in some compositions of government spending toward cultural expenditures impact growth slowdown, while an allocation toward education spending positively impacts economic growth.

Exploring the impact of public funds and eco-friendly innovations on reducing carbon pollution in North Africa.

The main objective of this study is to examine the impacts of green energy and public investment on the CO2 emissions in North Africa. Moreover, the study also tests the existence of the N-shaped Environmental Kuznets Curve (EKC) hypothesis for North African countries between 1995 and 2018. These factors were analyzed using the Dynamic Ordinary Least Squares (DOLS), Fully Modified Ordinary Least Squares (FMOLS), and Pooled Mean Group (PMG) estimators to obtain estimations of heterogeneous parameters. The outcome of these tests and examinations showed that the N-shaped curve was confirmed. Secondly, The results of the study also demonstrate the effectiveness of renewable energy as an eco-friendly innovation in reducing carbon emissions. This finding highlights the positive impact that renewable energy sources can have in terms of emitting fewer carbon emissions compared to traditional energy sources. Moreover, public investment, which interprets government expenditure, and urbanization contribute to environmental degradation by increasing CO2 emissions in the case of North African countries. Furthermore, the findings also indicated a trade-off effect resulting from the correlation between CO2 emissions and economic development. Based on these findings, the study recommends that economic policymakers in North African countries prioritize transforming the structure of government expenditures to improve environmental quality, optimize the utilization of revenues from non-environmentally friendly energy resources to accelerate the energy transition, increase the exploitation of renewable energy, and promote environmental awareness in society. By implementing these recommendations, North African countries can balance economic growth and environmental quality while reducing their carbon footprint.

How do vertical fiscal imbalances affect energy efficiency? The role of government spending on science and technology.

How to improve energy efficiency is a practical issue of common concern around the world. In China, vertical fiscal imbalances (VFIs) generated under the existing fiscal system may have a significant impact on energy efficiency through government spending on science and technology (S&T). However, this potential relationship has not been explored in the literature. In this work, we aim to address this gap. Using Chinese provincial panel data from 2001 to 2017, this study empirically examines the relationship between VFIs and energy efficiency through a mediation model. The results show that VFIs greatly suppress energy efficiency. We further find that VFIs indirectly affect energy efficiency by reducing government spending on S&T. The results show significant regional heterogeneity. The intermediary role of government S&T expenditure is more significant in inland areas than in coastal areas. Therefore, to improve energy efficiency and achieve sustainable development, the Chinese government should focus on innovative reform of the existing fiscal system and reduce VFIs. In addition, the government should focus on fiscal spending in the field of S&T to promote technological innovation to guarantee the improvement of energy efficiency. Inland areas should pay particular attention to this issue.

The role of government spending within the environmental Kuznets curve framework: evidence from G7 countries.

This study assesses the role of government spending on environmental sustainability based on a framework that combines the environmental Kuznets curve (EKC) hypothesis with the Armey curve hypothesis. Specifically, the inverted U-shaped relationships between carbon (CO2) emissions and economic growth (EKC hypothesis) and between government spending and economic growth (Armey curve hypothesis) are analyzed using a composite EKC model tested for cross-sectional dependence and heterogeneity, panel unit root, panel co-integration, and the augmented mean group estimation. In so doing, this study pursues a potential transmission mechanism leading from government spending to CO2 emissions through the growth channel and presents a novel way to develop a better understanding of how economic growth policy and energy policy can be synchronized. Empirical results show that economic growth acts as a transmitter between government spending and CO2 emissions in the USA, UK, and Canada. However, the composite EKC hypotehesis is confirmed only for the USA and Canada, where the optimal level of government spending that maximizes CO2 emissions is 29.87% and 29.22% of GDP, respectively. In contrast, the optimal level of government spending equivalent to 28.30% of GDP minimizes CO2 emissions in the UK. The key policy implication is that governments can achieve sustainable economic growth by setting standards for their spending levels.

The dynamics of public spending on sustainable green economy: role of technological innovation and industrial structure effects.

In order to achieve the goal of sustainable green economic development, it is necessary to conduct a comprehensive assessment of the efficiency of the green economy and compare it with emission reductions. The green economy idea is a much-discussed solution to economic growth. Therefore, this study investigated the impact of government spending on the performance of the green economy of various countries under the "Belt and Road" (BRI) initiative project. The data were analyzed using the BRI economy panel data from 2008 to 2018. The generalized method of moments (GMM) was used to estimate the effect of government expenditures on education and research and development (R&D) on green economic performance index (GEE) in BRI countries. The results reveal that during the study period, BRI countries have experienced an upward transition towards green development, except for Pakistan and Bangladesh; their GEE decreased gradually from 2010 to 2018. Further, the findings of the system GMM revealed that both education and R&D have a positive impact on the green economy. Moreover, the compositional and technological effects of the overall sample were verified with the GMM process. Nevertheless, the sub-sample results revealed a heterogeneous impact on countries with a high per capita GDP. Following the results, useful policy measures for promoting sustainable green economic development have been proposed.

How China controls the Covid-19 epidemic through public health expenditure and policy?

AIMS: How the Chinese government controls the Covid-19 epidemic? This paper aims to answer this question from the perspective of public health expenditure, and policy, and then to help the government to perform better in infectious disease prevention and public health emergency management. METHODS AND MATERIALS: We reviewed the development phases of the COVID-19 epidemic in China and divided it into four stages (incubation stage, outbreak stage, resolution stage, and stable stage). Then we adopted a content analysis method via MAXQDA2020, to analyze the combined application of four different types of policy tools in different stages with 571 texts of epidemic governance policy from the Chinese central government. We also calculated and compared the Chinese public health expenditure between epidemic and non-epidemic periods. Moreover, we also discussed implications for public health emergency management and for infectious disease prevention and control in China. RESULTS: (1) in the incubation stage, the potential epidemic has not attracted enough attention from the government; (2) the combination of the 4 types of policies is not only an important reason in controlling epidemic during the outbreak stage and resolution stage, but also the reason why the small-scale epidemic has not expanded in the stable stage; (3) the increasing Chinese public health expenditure, involving public health emergency treatment (114.81 billion yuan), government hospitals (284.84 billion yuan) and major public health service projects (45.33 billion yuan), is another critical reason for the rapid control of the epidemic. CONCLUSION AND IMPLICATIONS: Public health expenditure and policy played an important role in the governance and control of the COVID-19 epidemic in China. Some limitations of China's infectious disease prevention system and public health emergency management system have been exposed to the public in this epidemic, which the Chinese government needs to improve in the future.

Government Spending, GDP and Exchange Rate in Zero Lower Bound: Measuring Causality at Multiple Horizons.

This paper assesses the Granger causality between government spending and gross domestic product (GDP) in the United States at multiple horizons. This paper also analyses the role the real exchange rate plays in the causality measure during the zero lower bound (ZLB) period. Many researchers using theoretical models built in a closed economy suggest that the elasticity between government spending and GDP is very large, when the nominal interest rate is binding. Other researchers, also using theoretical models generally built in an open economy, suggest that the elasticity in the ZLB period is not large. The same conflicting results are reported in the empirical literature mostly using vector auto regressives (VARs), with different restrictions. In this paper, we use a different approach to measure the link between the two variables. The new approach has the advantage of not relying on any restrictions, as is the case with VARs when dealing with causalities. Moreover, our approach is not related to the way the model is built, as is the case with dynamic stochastic general equilibrium (DSGE) types of models. In this paper, we use a Granger causality measure to compare the causality for normal periods with the causality for the ZLB period. We emphasize the role played by the real exchange rate. Our empirical results provide evidence that the causality measures between government spending and GDP are larger and persistent in the ZLB period, but only if the exchange rate is not taken into account. When the exchange rate is taken into account, our measure of causality becomes very small and non-persistent.

Testing the Environmental Kuznets Curve Hypotheses in Chinese Provinces: A Nexus between Regional Government Expenditures and Environmental Quality.

With rapid economic growth, the Chinese government expenditures at various levels have increased adequately. At the same time, the environmental quality in China has deteriorated significantly. In this study, provincial-level data for 31 Chinese provinces during 2007-2017 are used to investigate the impacts of government expenditure on the emissions of three specific measures of environmental degradation. The main objective of this study is to examine the influence of government expenditures, economic growth per capita, environment protection expenditure, and added second-sector value on environmental quality by measuring sulfur dioxide (SO2), chemical oxygen demand (COD), and ammonia nitrogen emissions (AN). Moreover, the study applied the generalized method of moments (GMM) and the fully modified least square (FMOLS) to estimate the co-integration relationship among the underlying factors. The results demonstrate a significant direct effect of government expenditure on improving environmental quality overall in the Chinese provinces, which increases with the level of economic growth. However, the results also confirmed the inverted N-shaped relationship between the pollution factor and economic growth per capita. Our key findings lead toward the manifestation and emphasis of the importance of appropriate policies for restoring government expenditure and, at the same time, strengthening the relationship between the industrial sector and environmental policy standards. Significantly, governments in developing countries should allocate larger budgets for environmental projects in their fiscal reforms for the sake of moving to greener and more inclusive economies with low-carbon activities.

Tracking government spending on immunization: The joint reporting forms, national health accounts, comprehensive multi-year plans and co-financing data.

BACKGROUND: Coverage rates for immunization have dropped in lower income countries during the COVID-19 pandemic, raising concerns regarding potential outbreaks and premature death. In order to re-invigorate immunization service delivery, sufficient financing must be made available from all sources, and particularly from government resources. This study utilizes the most recent data available to provide an updated comparison of available data sources on government spending on immunization. METHODS: We examined data from WHO/UNICEF's Joint Reporting Form (JRF), country Comprehensive Multi-Year Plan (cMYP), country co-financing data for Gavi, and WHO National Health Accounts (NHA) on government spending on immunization for consistency by comparing routine and vaccine spending where both values were reported. We also examined spending trends across time, quantified underreporting and utilized concordance analyses to assess the magnitude of difference between the data sources. RESULTS: Routine immunization spending reported through the cMYP was nearly double that reported through the JRF (rho = 0.64, 95% 0.53 to 0.77) and almost four times higher than that reported through the NHA on average (rho = 3.71, 95% 1.00 to 13.87). Routine immunization spending from the JRF was comparable to spending reported in the NHA (rho = 1.30, 95% 0.97 to 1.75) and vaccine spending from the JRF was comparable to that from the cMYP data (rho = 0.97, 95% 0.84 to 1.12). Vaccine spending from both the JRF and cMYP was higher than Gavi co-financing by a at least two (rho = 2.66, 95% 2.45 to 2.89) and (rho = 2.66, 95% 2.15 to 3.30), respectively. IMPLICATIONS: Overall, our comparative analysis provides a degree of confidence in the validity of existing reporting mechanisms for immunization spending while highlighting areas for potential improvements. Users of these data sources should factor these into consideration when utilizing the data. Additionally, partners should work with governments to encourage more reliable, comprehensive, and accurate reporting of vaccine and immunization spending.

Wagner proposition in Nigeria: An econometric analysis.

Succinct exploration of Adolph Wagner's Proposition [WP] 1883 - Peacock and Wiseman 1961version was put to the validation test in the study. At least, this time, for a quinaquina octo annis period, representing the life span of Nigeria. Specific suspicion of shocks from data from the world indicator and monetary authority necessitated the adoption of the ADF test with structural breaks, which came out positive at alternating integrating order. This propelled the Autoregressive Distributed Lag ARDL model path having specified the lag selection automatically. Even though the series showed significant association in the short run, and bi-directional causality, the result of the Bound test - F-statistics (calculated) = 3.42 falls below upper Bound I(0) = 4.68 and lower bound I(1) = 5.15 hence, invalidates the WP position in the long - run in Nigeria. This is an indication that a reduction in non-economically viable and overlapping, funds-straining ministries/departments/agencies (MDA) is indispensable.

Did government spending cuts to social care for older people lead to an increase in emergency hospital admissions? An ecological study, England 2005-2016.

OBJECTIVES: Government spending on social care in England reduced substantially in real terms following the economic crisis in 2008, meanwhile emergency admissions to hospitals have increased. We aimed to assess the extent to which reductions in social care spend on older people have led to increases in emergency hospital admissions. DESIGN: We used negative binomial regression for panel data to assess the relationship between emergency hospital admissions and government spend on social care for older people. We adjusted for population size and for levels of deprivation and health. SETTING: Hospitals and adult social care services in England between April 2005 and March 2016. PARTICIPANTS: People aged 65 years and over resident in 132 local councils. OUTCOME MEASURES: Primary outcome variable-emergency hospital admissions of adults aged 65 years and over. Secondary outcome measure-emergency hospital admissions for ambulatory care sensitive conditions (ACSCs) of adults aged 65 years and over. RESULTS: We found no significant relationship between the changes in the rate of government spend (£'000 s) on social care for older people within councils and our primary outcome variable, emergency hospital admissions (Incidence rate ratio (IRR) 1.009, 95% CI 0.965 to 1.056) or our secondary outcome measure, admissions for ACSCs (IRR 0.975, 95% CI 0.917 to 1.038). CONCLUSIONS: We found no evidence to support the view that reductions in government spend on social care since 2008 have led to increases in emergency hospital admissions in older people. Policy makers may wish to review schemes, such as the Better Care Fund, which are predicated on a relationship between social care provision and emergency hospital admissions of older people.

Government Health and Social Services Spending Show Evidence of Single-Sector Rather Than Multi-Sector Pursuit of Population Health.

Population health improvements can be achieved through work made possible by government spending on health care, public health, and social services. The extent to which spending allocations across these sectors is synergistic with or trade-off against one another is unknown. Achieving a balanced portfolio with multi-sector contributions is key to improving health outcomes. This study tested competing hypotheses regarding achievement of balanced multi-sector resources for health. County-level U.S. Census Bureau data on all local governmental spending measured each county's average per capita local government spending for public hospitals, public health, social services, and education. American Hospital Association (AHA) Annual Survey data on hospital community health service provision were used to calculate an index of hospital community service provision aggregated to county level by year. County Health Rankings data measured each county's health outcomes and health factors. Longitudinal mixed-effects regression models (n = 1877 counties) predicted changes in spending for each government spending category based on two sets of predictors (government spending vs community health services and needs) from current and prior year. Models account for average spending in each category and county-, state-, and time-trends. Models showed that spending increases in each of the four spending categories examined (public hospitals, public health, social services, and education) were not associated with changes in spending across other categories in current or prior years. For all categories, an increase from baseline spending levels in Year 1 was always significantly associated with an increase from baseline spending level in that same category in Year 2 (ie, spending stayed above baseline in Year 2). Multi-sector initiatives to health outcomes require funding across sectors, yet there was little evidence to suggest that communities that invest in public hospitals, public health, or other social services see commensurate increases in other areas. Underlying funding decisions may reflect strategic decisions within a community to scale up single sectors, constrained resources for multi-sector scale up, or a host of additional factors not measured here.

Alocação dos gastos públicos e crescimento econômico: um estudo em painel para os estados brasileiros / La alocación de los gastos públicos y crecimiento económico: un estudio de datos en panel aplicado a los estados de Brasil / The allocation of government spending and economic growth: a panel data study of Brazilian states

Resumo Tendo em vista as restrições orçamentárias impostas aos governos, em contextos de crises e ajustes fiscais, faz-se necessária a discussão acerca do efeito da alocação dos gastos públicos sobre o estado da economia. Nesse sentido, o presente ensaio busca discutir os efeitos da alocação do gasto público sobre o comportamento do PIB real dos estados brasileiros. Para tanto, foi utilizado um painel convencional de Efeitos Fixos (EF), no período de 1995-2011. Os gastos em: (i) administração e planejamento, (ii) judiciário, (iii) habitação e urbanismo e (iv) assistência e previdência mostraram-se produtivos e os gastos em: (i) educação e cultura e (ii) legislativo mostraram-se improdutivos. Foram encontradas evidências de que a Lei de Responsabilidade Fiscal (LRF) tem sido benéfica ao crescimento econômico dos estados brasileiros.

Resumen El presente trabajo analiza los efectos de la alocación del gasto público sobre el crecimiento económico de los estados de Brasil en el período de 1995-2011. La investigación se realizó mediante el análisis de datos en panel. Los resultados muestran que los gastos con el: (i) ejecutivo, (ii) judicial, (iii) habitación y (iv) bienestar social impactaron el crecimiento económico positivamente, mientras que los gastos en: (i) educación y (ii) legislativo no tuvieron impacto productivo sobre el crecimiento económico. Además, la introducción de reglas fiscales a través de la "Ley de Responsabilidad Fiscal" ha sido beneficiosa al crecimiento de los estados.

Abstract The effect of the allocation of government spending on the economy is currently a subject of interest given the fiscal budget constraints facing governments due to fiscal crises or adjustments. This paper thus seeks to study the effects of the allocation of government spending on the GDP behavior of Brazilian states from 1995 to 2011. Using a conventional FE (Fixed Effect) panel data model, this paper's main results are as follows: (i) administration and planning, (ii) judicial, (iii) housing and (iv) social assistance spending were found to be productive, while (i) education and culture and (ii) legislative spending were found to be unproductive. In addition, some evidence has been found that the introduction of public borrowing rules by the Fiscal Responsibility Law has been beneficial to the economic growth of Brazilian states.