The aim of this paper is to investigate whether oil transfers (royalties and special tax) lead the benefited municipalities to increase the hiring of civil servants, in disagreement with the legal recommendations. For this, we applied the method Doubly Robust to a panel of municipalities observed between 2000 and 2009. The method consists of two stages. Firstly, it estimates the probability of receiving oil revenues conditioned on observable variables and, in a second stage, a fixed effect panel model was estimated with data belonging to a common support constructed from the estimated propensity scores in the first stage. The results show that local governments raise their workforce due to the enjoyment of oil revenues, but the average payroll expenditure does not increase in the treatment group. In Rio de Janeiro, subject to more specific determinations of its Court of Auditors, the effect is not significant, indicating adherence to the rules by the eligible municipalities.
propensity score; doubly robust; oil royalties; public employment; panel
