Dimitria Freitas

Job Market Paper

• Public Sector Relocation and Regional Development in Germany  (Job Market Paper)

Abstract: Regional economic disparities within countries have become increasingly large, often surpassing the disparities observed between countries. To address regional inequality, governments have been turning away from standard subsidies and are experimenting with public employment reallocation as a place-based policy. This paper estimates the causal effect of public employment reallocation on local labor markets. I study the ‘Heimatstrategie,’ which relocates around 3,000 public sector jobs from Munich to economically lagging regions in Bavaria, Germany. Using novel data on 60 agency relocations between 2015 and 2025, I exploit the government’s quantitative selection criteria for receiving municipalities and implement a long-differences design comparing treated Bavarian municipalities to Mahalanobis-matched control municipalities in other German states. My estimates show that relocations increased private sector employment shares by up to 2.3% (1.3 percentage points), reduced unemployment rates by up to 11.9% (0.33 percentage points), and increased local population by up to 1.6% without harming sending locations. These results correspond to a public-to-private jobs multiplier of 1.08. To assess general equilibrium effects of the relocation program, I implement a quantitative spatial model with a two-sector (public and private) framework, which confirms positive private employment effects in the sending locations and finds negligible welfare effects overall.

Awards: SOLE Poster Prize Winner at the 6th World Labor Conference in Toronto, Canada.

60 Second Pitch here.

Working Papers

• Do place-based policies matter at the poll? (with Luisa Doerr and Florian Dorn, ifo Munich)

• The Drivers of Far-Right Populism in Western Democracies (with Patrick Zwerschke)

• A comment on Xu (2022) Reshaping Global Trade: The Immediate and Long-Term Effects of Bank Failures (with Guillaume Bérard , Luxembourg Institute of Socio-Economic Research (LISER),  and Priyam Verma, Aix-Marseille Univ, CNRS, EHESS, AMSE, Marseille, France) 

Publications

Book Chapters

• Freitas, D., 2024. The Potential of Public Employment Reallocation as a Place-Based Policy (NBER Chapters). National Bureau of Economic Research, Inc. (edited by Cecile Gaubert, Gordon H. Hanson, and David Neumark)

Policy Papers

• Freitas, D., Syga, S., 2022. "35 cents less for gasoline and 17 cents less for diesel - The fuel tax reduction was passed on to consumers – on average." ifo Dresden berichtet 29, 13–18. Coverage: [DNN], [Bundeskartellamt - German Competition Authority], [Bundestag - German Parliament]

Work in Progress

• Does Surveillance Reduce Support for Far-Right Populist Parties? (with Simon Syga, CIDS TU Dresden)