LSE Business Review:
The multiplier effect of the German government move to Berlin
9 April 2018
Relocation is one successful example of public sector jobs boosting private sector activity, write Giulia Faggio, Teresa Schlüter and Philipp vom Berge. In a recent SERC discussion paper, we study the impact of the German government move from Bonn to Berlin in the 1990s in order to understand the interaction between public and private employment within a local labour market. Our goal is to identify which effect (multiplier or crowding-out) prevailed in the German government case and then to quantify the size of the effect.