The Efficiency of Public Employment in Germany’s States, Counties and Municipalities

Despite this growth in employee numbers, there are continued reports of staff shortages, with the discussion focusing mainly on additional employment in specific fields rather than on the efficient deployment of personnel overall. Using an econometric benchmark model, this study analyses whether the increase in personnel at the county and municipality level is justifiable, taking into account changes in regional structural factors such as demographics, the number of welfare claimants and infrastructure. The results reveal considerable differences between regions: some local authorities have managed with moderate staffing increases despite challenging conditions, while others have seen an above average expansion of their workforce. For example, if public sector employment at the state, county and municipal levels is compared between Germany’s sixteen states, the eastern state of Saxony-Anhalt is shown to have increased employment at a rate well below what could have been expected, though the level remains high. The northernmost state of Schleswig-Holstein, on the other hand, manifests the most inefficient employment trend with an inexplicable upward deviation from the value expected. Overall, there is a potential saving of around 60,000 full-time equivalents if all states were to follow a trend similar to Saxony-Anhalt’s.