As stated
Paul Bain et al.
Personality and Social Psychology Bulletin, forthcoming
Abstract:
We identified the active ingredients in people's visions of society's future ("collective futures") that could drive political behavior in the present. In eight studies (N = 595), people imagined society in 2050 where climate change was mitigated (Study 1), abortion laws relaxed (Study 2), marijuana legalized (Study 3), or the power of different religious groups had increased (Studies 4-8). Participants rated how this future society would differ from today in terms of societal-level dysfunction and development (e.g., crime, inequality, education, technology), people's character (warmth, competence, morality), and their values (e.g., conservation, self-transcendence). These measures were related to present-day attitudes/intentions that would promote/prevent this future (e.g., act on climate change, vote for a Muslim politician). A projection about benevolence in society (i.e., warmth/morality of people's character) was the only dimension consistently and uniquely associated with present-day attitudes and intentions across contexts. Implications for social change theories, political communication, and policy design are discussed.
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Gregory Huber & Celia Paris
Public Opinion Quarterly, forthcoming
Abstract:
In trying to understand why Americans display relatively high levels of opposition to welfare, scholars have frequently turned to the analysis of a canonical experiment reported in this journal (Smith 1987; Rasinski 1989) in which subjects were asked about their support for either "welfare" or "assistance to the poor." This experiment consistently shows that Americans are substantially less supportive of welfare than of assistance to the poor. This difference has been interpreted as evidence that simply describing the same core programs as welfare rather than assistance to the poor depresses support. The key assumption in these analyses is one of programmatic equivalence: relative to the words "assistance to the poor," the word "welfare" describes the same programs, but differs in which considerations it brings to mind. This research note examines the validity of this key assumption. Analyses of novel experimental data show that there appear to be basic differences in which programs Americans consider to be welfare and which they consider to be assistance to the poor. We discuss the implications of our research for interpreting prior studies that rely upon this experiment to test theories of framing, and we suggest broader implications for survey experimental designs.
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Explaining Social Policy Preferences: Evidence from the Great Recession
Yotam Margalit
American Political Science Review, February 2013, Pages 80-103
Abstract:
To what extent do personal circumstances, as compared to ideological dispositions, drive voters' preferences on welfare policy? Addressing this question is difficult because a person's ideological position can be an outcome of material interest rather than an independent source of preferences. The article deals with this empirical challenge using an original panel study carried out over four years, tracking the labor market experiences and the political attitudes of a national sample of Americans before and after the eruption of the financial crisis. The analysis shows that the personal experience of economic hardship, particularly the loss of a job, had a major effect on increasing support for welfare spending. This effect was appreciably larger among Republicans than among Democrats, a result that was not simply due to a "ceiling effect." However the large attitudinal shift was short lived, dissipating as individuals' employment situations improved. The results indicate that the personal experience of an economic shock has a sizable, yet overall transient effect on voters' social policy preferences.
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Uncertain Fiscal Consolidations
Huixin Bi, Eric Leeper & Campbell Leith
Economic Journal, February 2013, Pages F31-F63
Abstract:
This article explores the macroeconomic consequences of fiscal consolidations whose timing and composition - either tax- or spending-based - are uncertain. We find that the composition of the fiscal consolidation, its duration, the monetary policy stance, the level of government debt, and expectations over the likelihood and composition of fiscal consolidations all matter in determining the extent to which a given consolidation is expansionary or successful in stabilising government debt. We argue that the conditions that could render fiscal consolidation efforts expansionary are unlikely to apply in the current economic environment.
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Thomas Halvorsen & Jo Jakobsen
International Interactions, forthcoming
Abstract:
Does the partisan composition of state governments in the United States influence the location decisions of foreign multinational companies? The present paper argues that it does. We contend that partisan differences over state economic development policies still exist. Whereas Republicans tend to prefer an investment-driven (supply-side) growth model, Democrats favor a consumption-driven (demand-side) path to growth. Both sets of policies are of value to FDI; thus, multinationals do not favor one party over the other. A useful blend of policy measures is sought by foreign firms, making split state government preferable over unified government. Our arguments are comprehensively tested in a time-series cross-section analysis covering the period 1977-2004, with results supporting our claims.
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Amanda Sheely
Policy Studies Journal, February 2013, Pages 54-69
Abstract:
With the passage of welfare reform in 1996, state and local governments gained substantial authority to design and implement their own welfare programs. Proponents of devolution asserted that, under devolution, local governments would be better able to tailor program administration to meet local economic needs. However, opponents contended devolution could lead to local governments seeking to control costs by limiting access to welfare. Meanwhile, existing research suggests that economics will not play an important role in determining welfare provision. This article investigates these competing claims by assessing the relationship between economic conditions and administrative exclusion, which is making programs so hard to access that potential and current recipients decide to forgo benefits, in a state that gives counties significant authority over welfare provision. To do so, I assess whether county application denial, sanctioning, and case closure rates are influenced by changes in local economic characteristics. I find that, even during periods of substantial economic distress, county practices related to administrative exclusion are largely unresponsive to changes in unemployment, child poverty, and fiscal constraints. These findings call into question the responsiveness of the devolved social safety net for poor families.
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The Growth Of The Federal Crop Insurance Program, 1990-2011
Joseph Glauber
American Journal of Agricultural Economics, January 2013, Pages 482-488
"The federal crop insurance program has grown remarkably over the past 22 years since being earmarked for elimination in the 1990 farm bill. The reform acts of 1994 and 2000 provided substantial additional subsidies to the program, and resulted in large increases, both in participation and insurance coverage purchased. One measure of the success of the program is that disaster assistance is no longer seen as a potential substitute for crop insurance, but only as a supplement to cover that portion of crop losses that is not covered by insurance. As such, crop insurance has become a key fixture of the farm safety net. As farm prices have risen, crop revenue insurance coverage based on expected prices has offered more protection compared to fixed-price supports in more traditional farm programs such as counter-cyclical payments and marketing assistance loans. This has also meant a change in the distribution of benefits among commodity groups, and helps explain why insurance supplements are more popular with corn, wheat and soybean producers than with rice and cotton producers. The costs of the program have risen as well. The high marginal costs of an increasing enrolled area and coverage have raised program costs such that premium subsidy costs alone now top $7.5 billion. The sheer size of program costs has also attracted attention to the costs of delivering crop insurance and the relative efficiency of the program in transferring benefits to producers."
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Monetary Politics: Origins of the Federal Reserve
Sarah Binder & Mark Spindel
Studies in American Political Development, forthcoming
Abstract:
Nearly unique amongst the world's monetary bodies, the Federal Reserve defies description as a central bank. A century after its creation, the Fed retains a hybrid structure of a president-appointed, Senate-confirmed Washington board and twelve largely privately directed regional reserve banks-each of which remains moored in the cities originally selected in 1914. In this article we investigate the origins of the Federal Reserve System, focusing on the selection of the twelve reserve bank cities. In contrast to accounts that suggest politics played no role in the selection of the cities, we suggest that a range of political interests shaped Democrats' choices in designing the reserve system. The result was a decentralized institution that initially proved unable to coordinate monetary policy - a key contributor to the onset of the Great Depression less than two decades later.
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Customer-Driven Misconduct: How Competition Corrupts Business Practices
Victor Manuel Bennett et al.
Management Science, forthcoming
Abstract:
Competition among firms yields many benefits but can also encourage firms to engage in corrupt or unethical activities. We argue that competition can lead organizations to provide services that customers demand but that violate government regulations, especially when price competition is restricted. Using 28 million vehicle emissions tests from more than 11,000 facilities, we show that increased competition is associated with greater inspection leniency, a service quality attribute that customers value but is illegal and socially costly. Firms with more competitors pass customer vehicles at higher rates and are more likely to lose customers whom they fail, suggesting that competition intensifies pressure on facilities to provide illegal leniency. We also show that, at least in markets in which pricing is restricted, firms use corrupt and unethical practices as an entry strategy.
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Subways, Strikes, and Slowdowns: The Impacts of Public Transit on Traffic Congestion
Michael Anderson
NBER Working Paper, February 2013
Abstract:
Public transit accounts for only 1% of U.S. passenger miles traveled but nevertheless attracts strong public support. Using a simple choice model, we predict that transit riders are likely to be individuals who commute along routes with the most severe roadway delays. These individuals' choices thus have very high marginal impacts on congestion. We test this prediction with data from a sudden strike in 2003 by Los Angeles transit workers. Estimating a regression discontinuity design, we find that average highway delay increases 47% when transit service ceases. This effect is consistent with our model's predictions and many times larger than earlier estimates, which have generally concluded that public transit provides minimal congestion relief. We find that the net benefits of transit systems appear to be much larger than previously believed.
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Road investments and inventory reduction: Firm level evidence from China
Han Li & Zhigang Li
Journal of Urban Economics, forthcoming
Abstract:
This study presents new evidence on the causal impact of transport infrastructure on the economy. In China, inventory has declined over recent decades, while the country's road infrastructure has expanded rapidly. Building on the existing literature, we introduce new approaches, including a quasi-experiment based on differential demand for distant suppliers, to identify the causal relationship between road investments and inventory decline. Examining a large panel data set of Chinese manufacturers from 1998 to 2007, we find one dollar of road spending saves around two cents of inventory costs. This effect is non-trivial but less than that in the United States in the 1970s. Moreover, our estimates also suggest spillover effect from road investments to firms in neighboring provinces.
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Exploring the Role Delaware Plays as a Domestic Tax Haven
Scott Dyreng, Bradley Lindsey & Jacob Thornock
Journal of Financial Economics, forthcoming
Abstract:
We examine whether Delaware is a domestic tax haven. We find that taxes play an economically important role in determining whether U.S. firms locate subsidiaries in Delaware and that a Delaware-based state tax avoidance strategy lowers state effective tax rates by between 0.7 and 1.1 percentage points, on average. The tax savings represent a 15% to 24% decrease in the state income tax burden and translate to an increase in net income of 1.04% to 1.47%. However, we find that the tax benefits of Delaware tax strategies are diminishing over time in response to initiatives by state governments to limit multistate tax avoidance.
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The Partisan Policy Cycle and Firm Valuation
Isa Camyar & Bahar Ulupinar
European Journal of Political Economy, forthcoming
Abstract:
Our research probes the firm valuation impact of partisan-motivated policy cycles. We first identify the micro-channels of policy transmission that link partisan policy disturbances to firm value. Then, we draw on firm-level data from 21 industrial democracies for the period extending from 1989 to 2008 to examine whether government partisanship has any distinct impact on firm value. We identify a surprisingly large and consistent positive relationship of left-oriented governments with firm value. Additionally, our research finds that the partisan impact on firm value is appreciably conditioned by factors like economic openness.
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Public Welfare Spending and Private Social Services in U.S. States
Robert Lowry
State Politics & Policy Quarterly, March 2013, Pages 3-25
Abstract:
Social services in the United States are supplied by both the public and private sectors. Previous political science research has focused on public transfers or Medicaid; I study "Other Public Welfare" programs that include contracts and grants to private social services providers, focusing on the relationship between the two sectors. My results imply that an increase in either Other Public Welfare spending or private individual and family services employees leads to an increase in the other sector. I find weaker evidence of similar relationships involving private residential care or day care services, and private social services employment is generally independent of public spending on transfers and Medicaid. My results have implications for the full effects of changes in public welfare spending, including the effects on the private sector, as well as the effects of organized interests on public welfare spending.
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Framing the Poor: Media Coverage and U.S. Poverty Policy, 1960-2008
Max Rose & Frank Baumgartner
Policy Studies Journal, February 2013, Pages 22-53
Abstract:
Public policy toward the poor has shifted from an initial optimism during the War on Poverty to an ever-increasing pessimism. Media discussion of poverty has shifted from arguments that focus on the structural causes of poverty or the social costs of having large numbers of poor to portrayals of the poor as cheaters and chiselers and of welfare programs doing more harm than good. As the frames have shifted, policies have followed. We demonstrate these trends with new indicators of the depth of poverty, the generosity of the government response, and media framing of the poor for the period of 1960-2008. We present a simple statistical model that explains poverty spending by the severity of the problem, gross domestic product, and media coverage. We then create a new measure of the relative generosity of U.S. government policy toward the poor and show that it is highly related to the content of newspaper stories. The portrayal of the poor as either deserving or lazy drives public policy.
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Cumulative Harm and Resilient Liability Rules for Product Markets
Andrew Daughety & Jennifer Reinganum
Journal of Law, Economics, and Organization, forthcoming
Abstract:
In the traditional unilateral care model of products liability, expected harm is proportional to usage. Thus, all standard liability regimes yield the efficient choice of care by the firm, independent of the level of usage. This implies that liability for harm can be considered independently of market structure and competition. We find that when expected harm is cumulative (i.e., increasing and convex in usage), then different liability regimes produce different outcomes and yield different implications for social efficiency. Since the responsibilities for product and market performance are divided among relevant agencies and institutions, this presents a challenge to the correct design of rules for agents in the market. We argue for selection among alternative liability regimes based upon what we refer to as "resilience." Strict liability is a resilient policy; no liability and negligence are not resilient. Thus, we provide a new argument for strict liability with respect to product-generated harms.
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Effects of Bicycle Helmet Laws on Children's Injuries
Pinka Chatterji & Sara Markowitz
NBER Working Paper, February 2013
Abstract:
Cycling is popular among children, but results in thousands of injuries annually. In recent years, many states and localities have enacted bicycle helmet laws. We examine direct and indirect effects of these laws on injuries. Using hospital-level panel data and triple difference models, we find helmet laws are associated with reductions in bicycle-related head injuries among children. However, laws also are associated with decreases in non-head cycling injuries, as well as increases in head injuries from other wheeled sports. Thus, the observed reduction in bicycle-related head injuries may be due to reductions in bicycle riding induced by the laws.
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Testing the effects of self-regulation on industrial accidents
Stephen Finger & Shanti Gamper-Rabindran
Journal of Regulatory Economics, April 2013, Pages 115-146
Abstract:
Our study, the first to test the impact of self-regulation on industrial accidents, examines Responsible Care (RC) in the US chemical manufacturing sector. RC requires members to adhere to codes of conduct on production safety and pollution prevention. Using our author-constructed database of 1,867 firms that own 2,963 plants between 1988 and 2001, we instrument for firms' self-selection into RC using pollution-related regulatory pressure on firms that influences their probability of joining RC, but not plant-level accidents. We find that participation in RC reduces the likelihood of accidents by 2.99 accidents per 100 plants in a given year, or by 69.3%. Participation in RC also reduces the likelihood of process safety accidents and accidents related to violations of RC codes by 5.75 accidents per 100 plants in a given year, or by 85.9%. Alternatively, estimates using Propensity Score Matching (PSM) methods indicate that participation in RC reduces the likelihood of accidents by 0.66 accidents per 100 plants in a given year. The reduction in the likelihood of accidents, due to participation in RC, contributes to economically significant averted losses, with savings, even based on the smaller PSM estimates, totaling $180 million per year.
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The farm, the city, and the emergence of social security
Elizabeth Caucutt, Thomas Cooley & Nezih Guner
Journal of Economic Growth, March 2013, Pages 1-32
Abstract:
We study the social, demographic and economic origins of social security. The data for the U.S. and for a cross section of countries suggest that urbanization and industrialization are associated with the rise of social insurance. We describe an OLG model in which demographics, technology, and social security are linked together in a political economy equilibrium. In the model economy, there are two locations (sectors), the farm (agricultural) and the city (industrial) and the decision to migrate from rural to urban locations is endogenous and linked to productivity differences between the two locations and survival probabilities. Farmers rely on land inheritance for their old age and do not support a pay-as-you-go social security system. With structural change, people migrate to the city, the land loses its importance and support for social security arises. We show that a calibrated version of this economy, where social security taxes are determined by majority voting, is consistent with the historical transformation in the United States.
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Redistribution and Market Efficiency: An Experimental Study
Jens Großer & Ernesto Reuben
Journal of Public Economics, forthcoming
Abstract:
We study the interaction between competitive markets and income redistribution that reallocates unequal pre-tax market incomes away from the rich to the poor majority. In one setup, participants earn their income by trading in a double auction (DA) with exogenous zero or full redistribution. In another setup, after trading, they vote on redistributive tax policies in a majoritarian election with two competing candidates. This results in virtually full redistribution, even when participants have the opportunity to influence taxes by transferring money to the candidates. We find that the high redistribution reduces trading efficiency, but not as much as predicted if market participants trade randomly. This is because, rather than capitulating to the much lower trading incentives, many participants respond to redistribution by asking and bidding more conservatively in the DA, and in this way help to prevent further efficiency losses.