Is There an Election Cycle in Public Employment? Separating Time Effects from Election Year Effects

Do governments increase public employment in election years? This paper\nanswers this question by using data from Sweden and Finland, two countries that are similar in\nmany respects but in which local elections are held at different points in time. These facts make\nit possible for us to separate an election effect from other time effects. Our results indicate that\nthere is a statistically significant election year effect in local public employment, a production\nfactor that is highly visible in the welfare services provided by the local governments in the\nScandinavian countries. The effect also seems to be economically significant; the\nmunicipalities employ 0.6 more full-time employees per 1,000 capita in election years than in\nother years (which correspond to an increase by approximately 1 percent).