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The impact of public employment : evidence from Bonn
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Becker, Sascha O., Heblich, Stephan and Sturm, Daniel M. (2021) The impact of public employment : evidence from Bonn. Journal of Urban Economics, 122 . 103291. doi:10.1016/j.jue.2020.103291 ISSN 0094-1190.
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Official URL: https://doi.org/10.1016/j.jue.2020.103291
Abstract
This paper evaluates the impact of changes in public employment on private sector activity using the creation of the new West German government in Bonn in the wake of the Second World War as a source of exogenous variation. To guide our empirical analysis, we develop a simple economic geography model in which public sector employment affects private sector employment through its impact on wages and house prices and also through potential productivity and amenity spillovers to the private sector. We find that relative to a control group of cities, Bonn experiences a substantial increase in public employment. However, this results in only modest increases in private sector employment with each additional public sector job destroying around 0.2 jobs in industry and creating just over one additional job in other parts of the private sector. We show how our model can explain this finding and provide several pieces of evidence for the mechanisms emphasized by the model.
Item Type: | Journal Article | |||||||||
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Subjects: | H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HF Commerce |
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Divisions: | Faculty of Social Sciences > Economics | |||||||||
Library of Congress Subject Headings (LCSH): | Economic geography, Job creation -- Germany -- Bonn, Full employment policies -- Germany -- Bonn, Employment agencies -- Germany -- Bonn, Manpower policy -- Germany -- Bonn, Labor market -- Germany -- Bonn, Germany (West) -- Economic conditions -- 1990- | |||||||||
Journal or Publication Title: | Journal of Urban Economics | |||||||||
Publisher: | Academic Press | |||||||||
ISSN: | 0094-1190 | |||||||||
Official Date: | March 2021 | |||||||||
Dates: |
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Volume: | 122 | |||||||||
Article Number: | 103291 | |||||||||
DOI: | 10.1016/j.jue.2020.103291 | |||||||||
Status: | Peer Reviewed | |||||||||
Publication Status: | Published | |||||||||
Access rights to Published version: | Open Access (Creative Commons) | |||||||||
Date of first compliant deposit: | 29 October 2020 | |||||||||
Date of first compliant Open Access: | 3 November 2020 | |||||||||
RIOXX Funder/Project Grant: |
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