IDEAS home Printed from
MyIDEAS: Login to save this paper or follow this series

Electoral Cycles in Active Labor Market Policies

  • Mario Mechtel


    (Faculty of Economics and Social Sciences, University of Tübingen, Germany)

  • Niklas Potrafke


    (Department of Economics, University of Konstanz, Germany)

We examine how electoral motives influence active labor market policies that promote (short term) job-creation. Such policies reduce measures of unemployment. Using German state data for the period 1985 to 2004, we show that election-motivated politicians pushed jobpromotion schemes before elections.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Paper provided by Department of Economics, University of Konstanz in its series Working Paper Series of the Department of Economics, University of Konstanz with number 2011-39.

in new window

Length: 25 pages
Date of creation: 06 Oct 2011
Date of revision:
Handle: RePEc:knz:dpteco:1139
Contact details of provider: Postal: D-78457 Konstanz
Phone: +49-7531-88-3713
Fax: +49-7531-88-3130
Web page:

More information through EDIRC

Order Information: Web:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Sergio Sakurai & Naercio Menezes-Filho, 2008. "Fiscal policy and reelection in Brazilian municipalities," Public Choice, Springer, vol. 137(1), pages 301-314, October.
  2. David Roodman, 2009. "A Note on the Theme of Too Many Instruments," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 71(1), pages 135-158, 02.
  3. Newey, Whitney & West, Kenneth, 2014. "A simple, positive semi-definite, heteroscedasticity and autocorrelation consistent covariance matrix," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 33(1), pages 125-132.
  4. Georgios Efthyvoulou, 2012. "Political budget cycles in the European Union and the impact of political pressures," Public Choice, Springer, vol. 153(3), pages 295-327, December.
  5. R Blundell & Steven Bond, . "Initial conditions and moment restrictions in dynamic panel data model," Economics Papers W14&104., Economics Group, Nuffield College, University of Oxford.
  6. Alesina, Alberto, 1987. "Macroeconomic Policy in a Two-party System as a Repeated Game," Scholarly Articles 4552531, Harvard University Department of Economics.
  7. Linda Veiga & Francisco Veiga, 2007. "Political business cycles at the municipal level," Public Choice, Springer, vol. 131(1), pages 45-64, April.
  8. Graversen, Brian Krogh & van Ours, Jan C., 2008. "How to help unemployed find jobs quickly: Experimental evidence from a mandatory activation program," Journal of Public Economics, Elsevier, vol. 92(10-11), pages 2020-2035, October.
  9. Martial Foucault & Thierry Madies & Sonia Paty, 2008. "Public spending interactions and local politics. Empirical evidence from French municipalities," Public Choice, Springer, vol. 137(1), pages 57-80, October.
  10. David Bloom & David Canning & Rick Mansfield & Michael Moore, 2006. "Demographic Change, Social Security Systems, and Savings," PGDA Working Papers 1906, Program on the Global Demography of Aging.
  11. Mueller,Dennis C., 2003. "Public Choice III," Cambridge Books, Cambridge University Press, number 9780521894753, October.
  12. Kluve, Jochen & Lehmann, Hartmut & Schmidt, Christoph M., 2008. "Disentangling Treatment Effects of Active Labor Market Policies: The Role of Labor Force Status Sequences," Labour Economics, Elsevier, vol. 15(6), pages 1270-1295, December.
  13. Potrafke, Niklas, 2011. "Public Expenditures on Education and Cultural Affairs in the West German States: Does Government Ideology Influence the Budget Composition?," Munich Reprints in Economics 19277, University of Munich, Department of Economics.
  14. Sergio Sakurai & Naercio Menezes-Filho, 2011. "Opportunistic and partisan election cycles in Brazil: new evidence at the municipal level," Public Choice, Springer, vol. 148(1), pages 233-247, July.
  15. Bell, Stephen H. & Orr, Larry L., 2002. "Screening (and creaming?) applicants to job training programs: the AFDC homemaker-home health aide demonstrations," Labour Economics, Elsevier, vol. 9(2), pages 279-301, April.
  16. Alesina, Alberto, 1987. "Macroeconomic Policy in a Two-Party System as a Repeated Game," The Quarterly Journal of Economics, MIT Press, vol. 102(3), pages 651-78, August.
  17. Aidt, T.S. & Veiga, F.J. & Veiga, L.G., 2009. "Election Results and Opportunistic Policies: A New Test of the Rational Political Business Cycle Model," Cambridge Working Papers in Economics 0934, Faculty of Economics, University of Cambridge.
  18. Behr, Andreas, 2003. "A comparison of dynamic panel data estimators: Monte Carlo evidence and an application to the investment function," Discussion Paper Series 1: Economic Studies 2003,05, Deutsche Bundesbank, Research Centre.
  19. James H. Stock & Mark W. Watson, 2006. "Heteroskedasticity-Robust Standard Errors for Fixed Effects Panel Data Regression," NBER Technical Working Papers 0323, National Bureau of Economic Research, Inc.
  20. Nordhaus, William D, 1975. "The Political Business Cycle," Review of Economic Studies, Wiley Blackwell, vol. 42(2), pages 169-90, April.
  21. Margarita Katsimi & Vassilis Sarantides, 2010. "Do Elections Affect the Composition of Fiscal Policy?," CESifo Working Paper Series 2908, CESifo Group Munich.
  22. Potrafke, Niklas, 2009. "Political cycles and economic performance in OECD countries: empirical evidence from 1951-2006," MPRA Paper 23751, University Library of Munich, Germany.
  23. Giovanni S.F. Bruno, 2004. "Approximating the Bias of the LSDV Estimator for Dynamic Unbalanced Panel Data Models," KITeS Working Papers 159, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Jul 2004.
  24. Christina Schneider, 2010. "Fighting with one hand tied behind the back: political budget cycles in the West German states," Public Choice, Springer, vol. 142(1), pages 125-150, January.
  25. Kevin Grier, 2008. "US presidential elections and real GDP growth, 1961–2004," Public Choice, Springer, vol. 135(3), pages 337-352, June.
  26. Blais, Andre & Nadeau, Richard, 1992. " The Electoral Budget Cycle," Public Choice, Springer, vol. 74(4), pages 389-403, December.
  27. Frey, Bruno S & Schneider, Friedrich, 1978. "An Empirical Study of Politico-Economic Interaction in the United States," The Review of Economics and Statistics, MIT Press, vol. 60(2), pages 174-83, May.
  28. J. Stephen Ferris & Marcel-Cristian Voia, 2011. "Does the expectation or realization of a federal election precipitate Canadian output growth?," Canadian Journal of Economics, Canadian Economics Association, vol. 44(1), pages 107-132, February.
  29. Kenneth Rogoff & Anne Sibert, 1986. "Elections and Macroeconomic Policy Cycles," NBER Working Papers 1838, National Bureau of Economic Research, Inc.
  30. Potrafke, Niklas, 2012. "Is German domestic social policy politically controversial?," Munich Reprints in Economics 19274, University of Munich, Department of Economics.
  31. Fertig, Michael & Schmidt, Christoph M. & Schneider, Hilmar, 2002. "Active Labor Market Policy in Germany – Is There a Successful Policy Strategy?," IZA Discussion Papers 576, Institute for the Study of Labor (IZA).
  32. Douglas Nelson, 1989. "The Political Economy Of Trade Policy," Economics and Politics, Wiley Blackwell, vol. 1(3), pages 301-314, November.
  33. Belke, Ansgar, 2000. " Partisan Political Business Cycles in the German Labour Market? Empirical Tests in the Light of the Lucas-Critique," Public Choice, Springer, vol. 104(3-4), pages 225-83, September.
  34. Bryan Caplan, 2007. "Introduction to The Myth of the Rational Voter: Why Democracies Choose Bad Policies
    [The Myth of the Rational Voter: Why Democracies Choose Bad Policies]
    ," Introductory Chapters, Princeton University Press.
  35. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, vol. 58(2), pages 277-97, April.
  36. Goerke, Laszlo & Pannenberg, Markus & Ursprung, Heinrich W., 2007. "A Positive Theory of the Earnings Relationship of Unemployment Benefits," IZA Discussion Papers 3003, Institute for the Study of Labor (IZA).
  37. Giovanni S.F. Bruno, 2005. "Estimation and inference in dynamic unbalanced panel data models with a small number of individuals," KITeS Working Papers 165, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Jun 2005.
  38. Adi Brender & Allan Drazen, 2004. "Political Budget Cycles in New versus Established Democracies," NBER Working Papers 10539, National Bureau of Economic Research, Inc.
  39. Niklas Potrafke, 2010. "Labor market deregulation and globalization: empirical evidence from OECD countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 146(3), pages 545-571, September.
  40. Rafael Lalive & JanC. vanOurs & Josef Zweimüller, 2008. "The Impact of Active Labour Market Programmes on The Duration of Unemployment in Switzerland," Economic Journal, Royal Economic Society, vol. 118(525), pages 235-257, 01.
  41. Irem Batool & Gernot Sieg, 2009. "Bread and the attrition of power: Economic events and German election results," Public Choice, Springer, vol. 141(1), pages 151-165, October.
  42. Laitner, John, 2007. "Comment on: David Bloom, David Canning, Rick Mansfield, and Michael Moore's "Demographic change, social security systems, and savings"," Journal of Monetary Economics, Elsevier, vol. 54(1), pages 115-117, January.
  43. Reid, Bradford G, 1998. " Endogenous Elections, Electoral Budget Cycles and Canadian Provincial Governments," Public Choice, Springer, vol. 97(1-2), pages 35-48, October.
  44. Shi, Min & Svensson, Jakob, 2006. "Political budget cycles: Do they differ across countries and why?," Journal of Public Economics, Elsevier, vol. 90(8-9), pages 1367-1389, September.
  45. Berger, Helge & Woitek, Ulrich, 1997. " Searching for Political Business Cycles in Germany," Public Choice, Springer, vol. 91(2), pages 179-97, April.
  46. Frey, Bruno S & Schneider, Friedrich, 1978. "A Politico-Economic Model of the United Kingdom," Economic Journal, Royal Economic Society, vol. 88(350), pages 243-53, June.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:knz:dpteco:1139. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dr. Lisa Green)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.