Sectoral employment effects of state fiscal relief: evidence from the Great Recession

Bredemeier, Christian; Juessen, Falko; Winkler, Roland

doi:10.1017/s1365100522000062

Cited by 2 publications

(1 citation statement)

References 42 publications

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“…For example, similar to Nakamura and Steinsson (2014), we nd the largest multipliers in the construction and industry sectors. In addition, Corbi et al (2019) also estimate the largest multipliers in the construction sector, and Bredemeier et al (2020) show that the positive employment e ects of the ARRA package were strongest in the construction sector.…”

Section: Sectoral Analysismentioning

confidence: 91%

The Effects of Government Spending in the Eurozone

Gabriel

Klein

Pessoa

2023

Journal of the European Economic Association

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Using a newly assembled rich dataset at the regional level, this paper provides novel empirical evidence on the effects of fiscal policy in the Eurozone. Our baseline estimates reveal a government spending relative output multiplier around 2, an employment multiplier of 1.4, and a cost per job created of approximately €30,000. Moreover, we find that a regional fiscal stimulus leads to a significant increase in private investment, productivity, and durable consumption. The labor share also increases, as do total hours worked driven by changes in the extensive margin (total employment), whereas the intensive margin (hours per worker) barely reacts. Contrary to the common policy narrative of strong positive spillover effects, we estimate only small regional fiscal spillovers. Finally, our findings reveal strong heterogeneities across economic sectors, states of the economy, and member states.

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Section: Sectoral Analysismentioning

confidence: 91%

The Effects of Government Spending in the Eurozone

Gabriel

Klein

Pessoa

2023

Journal of the European Economic Association

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Labor market regulation and the cyclicality of involuntary part-time work

Markefke,

Müller-Rehm

2024

J Labour Market Res

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In times of economic crisis, many employers in liberal labor markets reduce their employees’ working hours, which leads to an increase in the incidence of involuntary part-time work. We analyze the effectiveness of working time regulation in preventing such an increase during downswings. For this we look at the case of Germany, where hours adjustments are highly restricted by law. Using a state-level panel regression approach, we find that the incidence of involuntary part-time work is positively associated with the unemployment rate but that the association is much weaker than in the US and in the UK. Transition probabilities between employment states over the cycle suggest two particular underlying mechanisms: First, already employed workers are more likely to want a full-time position in economic downturns (“added hours effect”). Second, job seekers make concessions with regards to their desired hours when labor market conditions are bad (“reservation hours effect”). We are the first to document these margins of cyclical hours adjustments which are fundamentally different from those in less regulated labor markets, where the cyclicality of involuntary part-time work is predominantly driven by hours changes at the same employer.

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Sectoral employment effects of state fiscal relief: evidence from the Great Recession

Cited by 2 publications

References 42 publications

The Effects of Government Spending in the Eurozone

The Effects of Government Spending in the Eurozone

Labor market regulation and the cyclicality of involuntary part-time work

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