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Public Sector Employment and Local Multipliers

Author

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  • Charlotte Senftleben-König

    (Humboldt-Universitaet zu Berlin)

Abstract

This paper assesses the spillover effects of public sector employment on private sector employment at the level of local labor markets in Germany between 2003 and 2007. I find that public sector employment has sizable crowding out effects on the private sector. The results suggest that 10 additional jobs in the public sector destroy 8 jobs in the private sector. I further show that public sector employment has an impact on the structure of the private sector. By raising wages in the private sector, public sector employment crowds out employment in the tradable sector. In contrast, employment in nontradable industries is largely unaffected. Creation Date: 2014-12-10

Suggested Citation

  • Charlotte Senftleben-König, "undated". "Public Sector Employment and Local Multipliers," BDPEMS Working Papers 2014010, Berlin School of Economics.
    • Handle: RePEc:bdp:wpaper:2014010
    as

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    References listed on IDEAS

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    More about this item

    Keywords

    Local labor markets; public sector employment; local multiplier effects;
    All these keywords.

    JEL classification:

    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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