<p>This paper investigates the effects of intergovernmental grants on municipal labour demand in Finland and Sweden during the period 1985-2002. Both these countries have large public sectors in which local authorities play a significant role. In addition, both countries went through major grant reforms in 1993, reforms that meant that most targeted grants were replaced by general, non-earmarked grants. This allows for studying the effects of the different types of grants separately. The results suggest that targeted grants affect Finnish municipal employment more than general ones do, at least when looking at levels. When looking at elasticities, however, the opposite is indicated. In Sweden intergovernmental grants appear to have no effect at all on municipal employment before the reform, but after the estimated elasticity is 0.10. This is somewhat lower than in Finland, where the estimated elasticities are 0.13 and 0.14 before and after the reform, respectively. The results also lend additional support to the so called “flypaper effect”, an empirical phenomenon that has been observed in numerous previous studies.</p>

This paper investigates the effects of intergovernmental grants on municipal labour demand in Finland and Sweden during the period 1985-2002. Both these countries have large public sectors in which local authorities play a significant role. In addition, both countries went through major grant reforms in 1993, reforms that meant that most targeted grants were replaced by general, non-earmarked grants. This allows for studying the effects of the different types of grants separately. The results suggest that targeted grants affect Finnish municipal employment more than general ones do, at least when looking at levels. When looking at elasticities, however, the opposite is indicated. In Sweden intergovernmental grants appear to have no effect at all on municipal employment before the reform, but after the estimated elasticity is 0.10. This is somewhat lower than in Finland, where the estimated elasticities are 0.13 and 0.14 before and after the reform, respectively. The results also lend additional support to the so called “flypaper effect”, an empirical phenomenon that has been observed in numerous previous studies.

ABSTRACT The aim of this study was to examine advantages and barriers that can appear when the municipal employment service and daily activity center work together in close collaboration. The study is based on semi-structured interviews with managers and employees in three municipalities in Värmland. The questions were:  How does the municipal employment service and the daily activity center work together?  Are the respondents experiencing any barriers in the collaboration processes between the municipal employment service and daily activity center?  Are the respondents experiencing any advantages when the municipal employment service and daily activity center work close together? If so, are the advantages primarily economical, professional or individual?  Does the collaboration processes in the three municipalities reflect the factors that supports as well as impedes collaboration that Danemark and Kullberg´s identified in their report (1999)? The results are analyzed from the new-institutional theory by Grapes (2006) and the factors that support and impede collaboration by Danemark &amp; Kullberg (1999). The study shows three completely different ways of collaboration. In Hagfors the two sectors collaborate primarily in daily job tasks, in Grums there are no collaboration at all and in Kristinehamn they collaborate at some extent regarding external work training sites. Furthermore, the results show some of the barriers the municipalities experience such as inadequate information, differences in knowledge as well as economy. The respondents could see great advantages for the individual in enhanced quality, teamwork among staff and in work performance. The summary that compiles factors who supports and impedes collaboration shows that in comparison, Hagfors is best prepared when it comes to collaboration between the two sectors and Grums is least equipped for working together.