Abstract
This research investigates how characteristics of the macro-level governing structure affect local public sector employment. The empirical model is tested using fixed effects with panel data that consist of 3031 county-type areas in the United States for five-year intervals from 1992 to 2012. We find that an increased level of fiscal decentralization is associated with larger labor input in the production of public services. Our statistical results also show that interjurisdictional competition leads to the growth of local public sector employment. Nevertheless, we do not find that spatial fragmentation and jurisdictional overlap have any significant relationship with the level of public sector employment.
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