Electoral cycles in active labor market policies
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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 job-promotion schemes before elections.
KeywordsPolitical business cycles Opportunistic politicians Active labor market policies
JEL ClassificationP16 J08 H72 E62 H61
We would like to thank Florian Baumann, Mark Bernard, Viktor Brech, Axel Dreher, Tim Friehe, Jan Fries, Laszlo Goerke, Florian Hett, Jeroen G. Klomp, Daria Orlova, Carsten Pohl, Nikolai Stähler, William F. Shughart II, Viktor Steiner, Heinrich Ursprung, two anonymous referees, the participants of the Annual Meeting of the Public Choice Society in Las Vegas 2009, the Annual Meeting of the European Public Choice Society in Athens 2009, the Annual Congress of the European Economic Association in Barcelona 2009, the Annual Conference of the European Society for Population Economics in Seville 2009, the Annual Meeting of the German Economic Association (Verein für Socialpolitik) in Magdeburg 2009, the CESifo Workshop on Political Economy in Dresden 2008, the Brown Bag Seminars at the University of Tübingen 2008 and the University of Konstanz 2008 as well as the Research Seminar at the University of Duisburg-Essen 2008 for helpful comments. Mario Mechtel gratefully acknowledges financial support from the German Research Foundation (DFG). Felix Weber has provided excellent research assistance.
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