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Are There Election Cycles in Wage Agreements? An Analysis of German Public Employees

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  • Matschke, Xenia

Abstract

In this article, the possibility of Nordhaus political wage cycles in the West German public services during 1961-65 is investigated. Since wage negotiations are centralized, one might expect a systematically higher wage increase shortly before a federal election. A regression of wage increases from 30 consecutive public sector pay contracts is run on an election variable and several additional explanatory variables. The null of no election influence is rejected for worker wage increases. The estimated increase in wages due to an imminent election is predicted to be in the range of 2.5 to 3 percentage points. Copyright 2003 by Kluwer Academic Publishers

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  • Matschke, Xenia, 2003. "Are There Election Cycles in Wage Agreements? An Analysis of German Public Employees," Public Choice, Springer, vol. 114(1-2), pages 103-135, January.
  • Handle: RePEc:kap:pubcho:v:114:y:2003:i:1-2:p:103-35
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    References listed on IDEAS

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    1. Bac, Mehmet, 1996. "Corruption and Supervision Costs in Hierarchies," Journal of Comparative Economics, Elsevier, vol. 22(2), pages 99-118, April.
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    Cited by:

    1. Afonso, António & Gomes, Pedro, 2014. "Interactions between private and public sector wages," Journal of Macroeconomics, Elsevier, pages 97-112.
    2. Gomes, Pedro Maia, 2017. "Heterogeneity and the Public Sector Wage Policy," IZA Discussion Papers 11091, Institute for the Study of Labor (IZA).
    3. repec:spr:izalpo:v:6:y:2017:i:1:d:10.1186_s40173-017-0086-0 is not listed on IDEAS
    4. Antoine Cazals & Alexandre Sauquet, 2015. "How do elections affect international cooperation? Evidence from environmental treaty participation," Public Choice, Springer, vol. 162(3), pages 263-285, March.
    5. Lamo, Ana & Schuknecht, Ludger & Pérez, Javier J., 2008. "Public and private sector wages: co-movement and causality," Working Paper Series 963, European Central Bank.
    6. Gonzalo Fernández-de-Córdoba & Javier Pérez & José Torres, 2012. "Public and private sector wages interactions in a general equilibrium model," Public Choice, Springer, vol. 150(1), pages 309-326, January.
    7. Alexandre SAUQUET & Antoine CAZALS, 2013. "When does cooperation win and why? Political cycles and participation in international environmental agreements," Working Papers 201320, CERDI.
    8. Lamo, Ana & Pérez, Javier J. & Schuknecht, Ludger, 2013. "Are government wages interlinked with private sector wages?," Journal of Policy Modeling, Elsevier, vol. 35(5), pages 697-712.
    9. M. Ivanova., 2015. "The Interaction between Public and Private Sector Wages," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 7.
    10. Maria M. Campos & Domenico Depalo & Evangelia Papapetrou & Javier J. Pérez & Roberto Ramos, 2017. "Understanding the public sector pay gap," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 6(1), pages 1-29, December.
    11. Björn Kauder & Manuela Krause & Niklas Potrafke, 2016. "Electoral Cycles in MPs' Salaries: Evidence from the German States," CESifo Working Paper Series 6028, CESifo Group Munich.

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