Electoral cycles in government employment: Evidence from US gubernatorial elections

Elections create incentives for politicians to manipulate policy to improve their re-election chances, and employment conditions are an important consideration formany voters. Politicians may opportunistically design policies that increase employment before elections, or postpone cuts until afterwards. I investigate electoralcycles in public sector employment around US gubernatorial elections. Taking advantage of the staggered nature of gubernatorial elections across states, I use bothfixed effects models and a geographic discontinuity design that compares neighboring counties at the borders of states with different election cycles. In the periodleading up to November each year, growth in both local and state government employment is higher in counties in states that experience gubernatorial electionscompared to counties in states that do not, by up to half a percentage point or more. In the post-electoral period, employment growth is lower by comparablemagnitudes in counties that just experienced an election. Both of these findings are consistent with manipulation in government employment. I also study heterogeneityacross different institutional and political environments, private sector employment, Senate elections, and show that the results hold up to a range ofrobustness and placebo tests.