Interaction of public and private employment: evidence from a German government move

Faggio, Giulia, Schlüter, Teresa and Berge, Philipp vom (2025) Interaction of public and private employment: evidence from a German government move. Regional Science and Urban Economics, 111. ISSN 0166-0462

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Abstract

We use the German government move from Bonn to Berlin in 1999 to explore the interaction between public and private sector employment within a local labor market. Our findings show a positive effect of public sector expansion on private sector employment, with a local multiplier of 1.32–1.35, mainly driven by the service sector. The policy impact is highly localized, strongest within 300 m of a relocation site, and evident one year after the relocation. Three quarters of new private sector jobs were created by establishments that did not exist before 1998. These newly created jobs disproportionally employ women, younger workers, individuals in managerial and professional roles, and those with lower levels of education.

Item Type:	Article
Additional Information:	© 2025 The Author(s)
Divisions:	Geography & Environment
Subjects:	H Social Sciences > HB Economic Theory J Political Science H Social Sciences > HD Industries. Land use. Labor
JEL classification:	R - Urban, Rural, and Regional Economics > R5 - Regional Government Analysis > R58 - Regional Development Policy R - Urban, Rural, and Regional Economics > R2 - Household Analysis > R23 - Regional Migration; Regional Labor Markets; Population J - Labor and Demographic Economics > J6 - Mobility, Unemployment, and Vacancies > J61 - Geographic Labor Mobility; Immigrant Workers O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O10 - General
Date Deposited:	07 Feb 2025 10:33
Last Modified:	28 Mar 2025 20:06
URI:	http://eprints.lse.ac.uk/id/eprint/127211

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