Abstract
We estimate the causal impact of a sizable German infrastructure investment program on employment at the county level. The program focused on improving the energy efficiency of school buildings, making it possible to use the number of schools as an instrument for investments. We find that the program was effective, creating one job for one year for each €25’000 of investments. The employment gains reached their peak after nine months and dropped to zero quickly after the program’s completion. The reductions in unemployment amounted to two-thirds of the job creation, and employment grew predominately in the construction and non-tradable industries
Item Type: | Paper |
---|---|
Keywords: | Infrastructure Investments, Job Creation, Employment Dynamics, Countercyclical Fiscal Policy |
Faculties: | Economics Economics > Munich Discussion Papers in Economics Economics > Munich Discussion Papers in Economics > Development Economics |
Subjects: | 300 Social sciences > 330 Economics |
JEL Classification: | E24, E62, H72, J23 |
URN: | urn:nbn:de:bvb:19-epub-34877-5 |
Language: | English |
Item ID: | 34877 |
Date Deposited: | 01. Mar 2017, 11:19 |
Last Modified: | 08. Nov 2020, 11:19 |
References: | Acconcia, Antonio, Giancarlo Corsetti, and Saverio Simonelli, “Mafia and Public Spending: Evidence on the Fiscal Multiplier from a Quasi-Experiment,” American Economic Review, 2014, 104 (7), 2185–2209. Angrist, Joshua David and Jörn-Steffen Pischke, Mostly Harmless Econometrics: An Empiricist’s Companion, Princeton: Princeton University Press, 2009. Auerbach, Alan J. and Yuriy Gorodnichenko, “Measuring the Output Responses to Fiscal Policy,” American Economic Journal: Economic Policy, 2012, 4 (2), 1–27. Bartik, Timothy J., Who Benefits from State and Local Economic Development Policies? Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, 1991. Becker, Gary, “Infrastructure in a Stimulus Package,” 2009. Beetsma, Roel and Massimo Giuliodori, “The Effects of Government Purchases Shocks: Review and Estimates for the EU,” Economic Journal, 2011, 121 (550), F4–F32. Blanchard, Olivier Jean and Roberto Perotti, “An Empirical Characterization of the Dynamic Effects of Changes in Government Spending and Taxes on Output,” Quarterly Journal of Economics, 2002, 117 (4), 1329–1368. Buchheim, Lukas, Matthias Wilhelm, and Martin Watzinger, “Investment in Photovoltaics and Job Creation: Evidence from a Billion Dollar Program,” mimeo, 2016. Bundesministerium der Finanzen, “Haushaltsplan 2011,” 2011. , “Haushaltsplan 2012,” 2012. , “Haushaltsplan 2013,” 2013. , “Monatsbericht des BMF Juli 2013,” 2013. Bundesministerium für Wirtschaft und Technologie, “Konjunktur- und wachstumspolitische Maßnahmen der Bundesregierung in der Wirtschafts- und Finanzkrise,” 2011. Bundesrechnungshof, “Bericht nach § 99 BHO über die Auswirkungen der Vergabeerleichterungen des Konjunkturpakets II auf die Beschaffung von Bauleistungen und freiberuflichen Leistungen bei den Bauvorhaben des Bundes,” 2012. Burda, Michael C. and Jennifer Hunt, “What Explains the German Labor Market Miracle in the Great Recession,” Brookings Papers on Economic Activity, 2011, 42 (1), 273–335. Chodorow-Reich, Gabriel, Laura Feiveson, Zachary Liscow, and William Gui Woolston, “Does State Fiscal Relief During Recessions Increase Employment? Evidence from the American Recovery and Reinvestment Act,” American Economic Journal: Economic Policy, 2012, 4 (3), 118–145. Clemens, Jeffrey and Stephen Miran, “Fiscal Policy Multipliers on Subnational Government Spending,” American Economic Journal: Economic Policy, 2012, 4 (2), 46–68. Conley, Timothy G. and Bill Dupor, “The American Recovery and Reinvestment Act: Solely a Government Jobs Program?,” Journal of Monetary Economics, 2013, 60 (5), 535–549. Corbi, Raphael, Elias Papaioannou, and Paolo Surico, “Federal Transfer Multipliers. Quasi-Experimental Evidence from Brazil,” NBER Working Paper, 2014, 20751. Dube, Arindrajit, Ethan Kaplan, and Ben Zipperer, “Excess Capacity and Heterogeneity in the Fiscal Multiplier: Evidence from the Obama Stimulus Package,” Working Paper, 2014. Dupor, Bill, “Local and Aggregate Fiscal Policy Multipliers,” Federal Reserve Bank of St. Louis Working Paper, 2016, 2016-004. Dupor, Bill and M. Saif Mehkari, “Schools and Stimulus,” Working Paper, 2015. Dupor, Bill and M. Saif Mehkari, “The 2009 Recovery Act: Stimulus at the Extensive and Intensive Labor Margins,” European Economic Review, 2016, 85, 208–228. Dupor, Bill and Peter B. McCrory, “A Cup Runneth Over: Fiscal Policy Spillovers from the 2009 Recovery Act,” Federal Reserve Bank of St. Louis Working Paper, 2015, 2014-029. Eggertsson, Gauti B. and Paul Krugman, “Debt, Deleveraging, and the Liquidity Trap: A Fisher-Minsky-Koo Approach,” Quarterly Journal of Economics, 2012, 127 (3), 1469–1513. Farhi, Emmanuel and Iván Werning, “Fiscal Multipliers: Liquidity Traps and Currency Unions,” in John B. Taylor and Harald Uhlig, eds., Handbook of Macroeconomics, Vol. 2, Elsevier, 2016, pp. 2417–2492. Feyrer, James and Bruce Sacerdote, “Did the Stimulus Stimulate? Real Time Estimates of the Effects of the American Recovery and Reinvestment Act,” NBER Working Paper, 2011, 16759. Fuchs-Schündeln, Nicola and Tarek A. Hassan, “Natural Experiments in Macroeconomics,” in John B. Taylor and Harald Uhlig, eds., Handbook of Macroeconomics, Vol. 2, Elsevier, 2016, pp. 923–1012. Garin, Andy, “Putting America to Work, Where? The Limits of Infrastructure Construction as a Locally-Targeted Employment Policy,” Taubman Center Working Paper,2016, 2016-01. Glaeser, Edward, “If You Build It... Myths and Realities about America’s Infrastructure Spending,” City Journal, 2016, Summer 2016. Green, Daniel, Brian Melzer, Johnathan A. Parker, and Arcenis Rojas, “Accelerator or Brake? Microeconomic Estimates of the ‘Cash for Clunkers’ and Aggregate Demand,” NBER Working Paper, 2016, 22878. IMF, World Economic Outlook, October 2014: Legacies, Clouds, Uncertainties, Vol. 2014,Oct, Washington and DC: International Monetary Fund, 2014. Kamps, Christophe, “The Dynamic Effects of Public Capital: VAR Evidence for 22 OECD Countries,” International Tax and Public Finance, 2005, 12 (4), 533–558. Leduc, Sylvain and Daniel Wilson, “Roads to Prosperity or Bridges to Nowhere? Theory and Evidence on the Impact of Public Infrastructure Investment,” NBER Macroeconomics Annual, 2013, 27 (1), 89–142. Leduc, Sylvain and Daniel Wilson, “Infrastructure Spending as Fiscal Stimulus: Assessing the Evidence,” Review of Economics and Institutions, 2014, 5 (1), 2–24. Leduc, Sylvain and Daniel Wilson, “Are State Governments Roadblocks to Federal Stimulus? Evidence on the Flypaper Effect of Highway Grants in the 2009 Recovery Act,” Federal Reserve Bank of San Francisco Working Paper, 2015, 2013-16. Leeper, Eric M., Todd B.Walker, and Shu-Chun S. Yang, “Government Investment and Fiscal Stimulus,” Journal of Monetary Economics, 2010, 57 (8), 1000–1012. Mian, A. and A. Sufi, “The Effects of Fiscal Stimulus: Evidence from the 2009 Cash for Clunkers Program,” Quarterly Journal of Economics, 2012, 127 (3), 1107–1142. Nakamura, Emi and Jón Steinsson, “Fiscal Stimulus in a Monetary Union: Evidence from US Regions,” American Economic Review, 2014, 104 (3), 753–792. OECD, “The Effectiveness and Scope of Fiscal Stimulus,” in OECD, ed., OECD Economic Outlook, Interim Report March 2009, Paris: OECD Publishing, 2009. Owyang, Michael T., Valerie A. Ramey, and Sarah Zubairy, “Are Government Spending Multipliers Greater during Periods of Slack? Evidence from Twentieth- Century Historical Data,” American Economic Review, 2013, 103 (3), 129–134. Parker, Jonathan A., “On Measuring the Effects of Fiscal Policy in Recessions,” Journal of Economic Literature, 2011, 49 (3), 703–718. Parker, Jonathan A., Nicholas S. Souleles, David S. Johnson, and Robert McClelland, “Consumer Spending and the Economic Stimulus Payments of 2008,” American Economic Review, 2013, 103 (6), 2530–2553. Pereira, Alfredo M., “Is All Public Capital Created Equal?,” Review of Economics and Statistics, 2000, 82 (3), 513–518. Perotti, Roberto, “Public Investment: Another (Different) Look,” IGIER Working Paper, 2004, 277. Porcelli, Francesco and Riccardo Trezzi, “Reconstruction Multipliers,” FEDS Working Paper, 2014, 2014-79. Ramey, Valerie A., “Can Government Purchases Stimulate the Economy?,” Journal of Economic Literature, 2011, 49 (3), 673–685. Ramey, Valerie A., “Identifying Government Spending Shocks: It’s all in the Timing,” Quarterly Journal of Economics, 2011, 126 (1), 1–50. Rendahl, Pontus, “Fiscal Policy in an Unemployment Crisis,” Review of Economic Studies, forthcoming. Sanderson, Eleanor and Frank Windmeijer, “A Weak Instrument F-Test in Linear IV Models with Multiple Endogenous Variables,” Journal of Econometrics, 2016, 190 (2), 212–221. Shoag, Daniel, “The Impact of Government Spending Shocks: Evidence on the Multiplier from State Pension Plan Returns,” Harvard Kennedy School Working Paper, 2010. Slansky, Friederike, “Bund-Länder-Konjunkturprogramm – Wo kommen die Finanzhilfen an?,” Nationalatlas Aktuell, 2010, 4. Stock, James H. and Motohiro Yogo, “Testing for Weak Instruments in Linear IV Regression,” Identification and Inference for Econometric Models: Essays in Honor of Thomas Rothenberg, 2005. Suárez Serrato, Juan Carlos and Philippe Wingender, “Estimating Local Fiscal Multipliers,” NBER Working Paper, 2016, 22425. Summers, Lawrence H., “Summary of Testimony to House Budget Committee, September 9th 2008,” 2008. Wilson, Daniel J., “Fiscal Spending Jobs Multipliers: Evidence from the 2009 American Recovery and Reinvestment Act,” American Economic Journal: Economic Policy, 2012, 4 (3), 251–282. |