Political Cycles in Active Labor Market Policies

This paper examines a framework in which politicians can decrease unemployment via active labor market policies (ALMP). We combine theoretical models on partisan and opportunistic cycles and assume that voters are ignorant of the necessary facts to make informed voting decisions. The model predicts that politicians have incentives for a strategic use of active labor market policies that leads to a political cycle in unemployment and budget deficit. We test the hypotheses predicted by the theoretical model using data from German states from 1985:1 to 2004:11. The results illustrate that opportunistic behavior of politicians can explain the development of ALMP approximated by job-creation schemes.active labor market policies, political cycles, labor market expenditures, opportunistic politicians, partisan politicians

It's the occupation, stupid! Explaining candidates' success in low-information local elections

We analyze the effects of personal characteristics of 4239 political candidates on their performance in local elections in Germany. Our results show that a candidate's occupation plays a decisive role. Occupational effects can be explained by (a) an occupation's public reputation and (b) public renownedness of individuals carrying out certain occupations. The findings regarding the occupational reputation effects are strongly correlated with polls on occupational reputation/prestige in the US and Germany

Electoral Cycles in Active Labor Market Policies

We examine how electoral motives influence active labor market policies that promote job-creation. Such policies reduce unemployment statistics. Using German state data for the period 1985 to 2004, we show that election-motivated politicians pushed job-promotion schemes before elections. --political business cycles,opportunistic politicians,active labor market policies

Political Cycles in Active Labor Market Policies

This paper examines how electoral motives and government ideology influence active labor market policies (ALMP). We present a model that explains how politicians strategically use ALMP to generate political cycles in unemployment and the budget deficit. Election-motivated politicians increase ALMP spending before elections irrespective of their party ideology. Leftwing politicians spend more on ALMP than rightwing politicians. We test the hypotheses derived from our model using German state data from 1985:1 to 2004:11. The results suggest that ALMP (job-creation schemes) were pushed before elections.active labor market policies, political cycles, labor market expenditures, opportunistic politicians, partisan politicians

Conspicuous consumption and communism: Evidence from East and West Germany

This paper investigates the influence of the political regime on the relative importance of conspicuous consumption. We use the separation of Germany into the communist GDR and the democratic FRG and its reunification in 1990 as a natural experiment. Relying on household data that are representative for Germany, our empirical results strongly indicate that conspicuous consumption is relatively more important in East Germany. Importantly, a significant gap in conspicuous consumption expenditures remains even 18 years after the reunification

Peer settings induce cheating on task performance

Recent research has shown that the presence of peers can increase individual output both in the lab and the field. This paper tests for negative side effects of peer settings. We investigate whether peer settings are particularly prone to cheating even if they do not provide additional monetary benefits of cheating. Participants in our real effort experiment had the opportunity to cheat when declaring their output levels. Although cheating did not have different monetary consequences when working alone than when working in the presence of a peer, we find that cheating is a more severe problem in peer settings

Peer Effects in Cheating on Task Performance

Recent research has shown that the presence of peers can increase individual output both in the lab and the field. As a new explanation for higher individual output levels, we test whether peer settings are particularly prone to cheating even if peer settings do not provide additional monetary benefits of cheating. Participants in our real effort experiment had the opportunity to cheat when declaring their output levels. Although cheating did not have different monetary consequences when working alone than when working in the presence of a peer, we find that cheating on task performance is a more severe problem in peer settings. Our results potentially have far-reaching repercussions regarding organizational design in the context of group settings where principals are not fully able to observe agents' output levels

Aktive Arbeitsmarktpolitik und Wahltermine

Zahlreiche Studien haben gezeigt, dass Wähler ihre Zustimmung oder Ablehnung zur amtierenden Regierung entscheidend davon abhängig machen, wie sie deren Leistung in Bezug auf die Arbeitsmarktsituation einschätzen. Regierungen haben aus diesem Grund einen Anreiz, Arbeitslosigkeit insbesondere vor Wahlen zu reduzieren, um an Popularität zu gewinnen und ihre Wiederwahlchancen zu vergrößern. Ein möglicher Weg für Regierungen, dieses Ziel zu erreichen, ist – wie in einer aktuellen Studie, die auf Daten für die westdeutschen Bundesländer über den Zeitraum von 1985 bis 2004 basiert, gezeigt wird – die Einführung von Maßnahmen der aktiven Arbeitsmarktpolitik, um die offiziellen Arbeitslosenzahlen rechtzeitig vor dem Urnengang zu senken

Conspicuous consumption and communism: Evidence from East and West Germany

This paper investigates the influence of the political regime on the relative importance of conspicuous consumption. We use the separation of Germany into the communist GDR and the democratic FRG and its reunification in 1990 as a natural experiment. Relying on household data that are representative for Germany, our empirical results strongly indicate that conspicuous consumption is relatively more important in East Germany. Importantly, a significant gap in conspicuous consumption expenditures remains even 18 years after the reunification

Gambling to Leapfrog in Status?

This paper shows that households with positional concerns and convex status utility use gambling to attempt leapfrogging in the social hierarchy. We test this theoretical prediction relying on household data that is representative for Germany, proxying the status orientation of households by their expenditures for conspicuous consumption. Our empirical results strongly indicate that households who care about status are more likely to participate in gambling and invest more in gambling, while they save less. In addition, results regarding socio-economic and demographic characteristics are reported. For example, we find that households in East Germany are less likely to gamble and expend smaller amounts on gambling