Differential Impacts of Provincial Government Expenditures: An Application of Input-Output Analysis

Economists have long been concerned with the impact of total government expenditures on employment, level of income, and income distribution. However, only recently has attention been paid to the effects of changes in the compostion of these expenditures. These studies have generally tended to neglect that variations in government expenditures entail changes in industrial purchases as a consequence of changes in government programs or functions (e.g., education, health, and so forth). This paper utilizes an input-output model to trace the impact of government expenditures, organized by function, on the level of income, employment, and distribution of income.