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Is there an election cycle in public employment? Separating time effects from election year effects

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  • Matz Dahlberg

    () (Uppsala University, IFAU, CESifo & IEB)

  • Eva Mörk

    () (Uppsala University, IFAU, CESifo, IZA & IEB)

Abstract

Do governments increase public employment in election years? This paper answers this question by using data from Sweden and Finland, two countries that are similar in many respects but in which local elections are held at different points in time. These facts make it possible for us to separate an election effect from other time effects. Our results indicate that there is a statistically significant election year effect in local public employment, a production factor that is highly visible in the welfare services provided by the local governments in the Scandinavian countries. The effect also seems to be economically significant; the municipalities employ 0.6 more full-time employees per 1,000 capita in election years than in other years (which correspond to an increase by approximately 1 percent).

Suggested Citation

  • Matz Dahlberg & Eva Mörk, 2011. "Is there an election cycle in public employment? Separating time effects from election year effects," Working Papers 2011/8, Institut d'Economia de Barcelona (IEB).
    • Handle: RePEc:ieb:wpaper:2011/4/doc2011-8
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    Cited by:

    1. Marta Curto-Grau, 2017. "Voters’ responsiveness to public employment policies," Public Choice, Springer, vol. 170(1), pages 143-169, January.
    2. Jon Fiva & Gisle Natvik, 2013. "Do re-election probabilities influence public investment?," Public Choice, Springer, vol. 157(1), pages 305-331, October.
    3. Baskaran, Thushyanthan & Brender, Adi & Blesse, Sebastian & Reingewertz, Yaniv, 2016. "Revenue decentralization, central oversight and the political budget cycle: Evidence from Israel," European Journal of Political Economy, Elsevier, vol. 42(C), pages 1-16.
    4. Mörk, Eva & Nordin, Mattias, 2016. "Voting, Taxes and Heterogeneous Preferences: Evidence from Swedish Local Elections," Working Paper Series 2016:5, Uppsala University, Department of Economics.
    5. Lasse Aaskoven, 2016. "Fiscal Transparency, Elections and Public Employment: Evidence from the OECD," Economics and Politics, Wiley Blackwell, vol. 28(3), pages 317-341, November.
    6. Foremny, Dirk & Riedel, Nadine, 2014. "Business taxes and the electoral cycle," Journal of Public Economics, Elsevier, vol. 115(C), pages 48-61.
    7. Gupta, Sanjeev & Liu, Estelle X. & Mulas-Granados, Carlos, 2016. "Now or later? The political economy of public investment in democracies," European Journal of Political Economy, Elsevier, vol. 45(C), pages 101-114.
    8. Maria Teresa Balaguer-Coll & María Isabel Brun-Martos & Anabel Forte & Emili Tortosa-Ausina, 2014. "Determinants of local governments'­ reelection: New evidence based on a Bayesian approach," Working Papers 2014/06, Economics Department, Universitat Jaume I, Castellón (Spain).
    9. Jakob Haan & Jeroen Klomp, 2013. "Conditional political budget cycles: a review of recent evidence," Public Choice, Springer, vol. 157(3), pages 387-410, December.
    10. Eckardt, Sebastian & Mills, Zachary, 2014. "What goes up must come down -- cyclicality in public wage bill spending," Policy Research Working Paper Series 6760, The World Bank.
    11. Michael Klien, 2015. "The political side of public utilities: How opportunistic behaviour and yardstick competition shape water prices in Austria," Papers in Regional Science, Wiley Blackwell, vol. 94(4), pages 869-890, November.
    12. Labonne, Julien, 2016. "Local political business cycles: Evidence from Philippine municipalities," Journal of Development Economics, Elsevier, vol. 121(C), pages 56-62.
    13. Balaguer-Coll, Maria Teresa & Brun-Martos, María Isabel & Forte, Anabel & Tortosa-Ausina, Emili, 2015. "Local governments' re-election and its determinants: New evidence based on a Bayesian approach," European Journal of Political Economy, Elsevier, vol. 39(C), pages 94-108.
    14. Al-Ississ, Mohamad & Atallah, Samer, 2015. "Patronage and ideology in electoral behavior: Evidence from Egypt's first presidential elections," European Journal of Political Economy, Elsevier, vol. 37(C), pages 241-248.
    15. Aggeborn, Linuz, 2016. "Voter turnout and the size of government," European Journal of Political Economy, Elsevier, vol. 43(C), pages 29-40.

    More about this item

    Keywords

    election cycle; public employment; exogenous elections;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism

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