Jobs Cronyism in Public-Sector Firms

Pedro Martins

No 624, GLO Discussion Paper Series from Global Labor Organization (GLO)

Abstract: Politicians can use the public sector to give jobs to cronies, at the expense of the efficiency of those organisations and general welfare. In this paper, we regress monthly hires across all firms in Portugal with some degree of public ownership on the country's 1980-2018 political cycle. We find that public-sector appointments increase significantly over the months just after elections but only if the new government is of a different political colour than its predecessor. These results are consistent with a simple model of cronyism and hold in multiple robustness checks. Overall, we find our evidence to be consistent with politically-induced misallocation of public resources.

Keywords: Corruption; matched employer-employee panel data; public-sector employment (search for similar items in EconPapers)
JEL-codes: H11 J23 J45 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-lma
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:glodps:624

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