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This paper investigates interdependence among local councils in Italy in their public spending and distinguishes between possible sources of this interdependence. We find significant positive interaction among neighbouring local councils in regard to both spending at the level of total expenditure and spending on different sub-categories. Attempts to identify the source of this horizontal interaction seem to reject the yardstick competition hypothesis. Addressing the role that local council partnerships may play in internalising fiscal externalities, we suggest that expenditure interaction may be driven by spill-over.

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This paper addresses the wage returns to interregional mobility among Italian Ph.D workers. We control for selection bias in both migration and occupation choice by estimating a double sample selection model. While OLS estimates indicate a positive wage premium of mobility across all types of occupations examined, wage equations estimated by correcting for double sample selection evidence a wage penalty for movers within academia, no effects for movers carrying out R&D activities but positive returns if they work within the industry sector. The selection process appears to be stronger when mobility choice is considered in comparison to the choice of occupation.