public employees as politicians evidence from close elections we analyze the effect of municipal employees political representation in municipal councils on local public spending we use within party as good as random variation in close elections in the finnish open list proportional election system to quantify the effect one more councilor employed by the public sector increases spending by about 1 the effect comes largely through the largest party and is specific to the employment sector of the municipal employee the results are consistent with public employees having an information advantage over other politicians and thus being able to influence policy

women s suffrage political responsiveness and child survival in american history women s choices appear to emphasize child welfare more than those of men this paper presents new evidence on how suffrage rights for american women helped children to benefit from the scientific breakthroughs of the bacteriological revolution consistent with standard models of electoral competition suffrage laws were followed by immediate shifts in legislative behavior and large sudden increases in local public health spending this growth in public health spending fueled large scale door to door hygiene campaigns and child mortality declined by 8 15 or 20 000 annual child deaths nationwide as cause specific reductions occurred exclusively among infectious childhood killers sensitive to hygienic conditions

women as policy makers evidence from a randomized policy experiment in india this paper uses political reservations for women in india to study the impact of women s leadership on policy decisions since the mid 1990 s one third of village council head positions in india have been randomly reserved for a woman in these councils only women could be elected to the position of head village councils are responsible for the provision of many local public goods in rural areas using a dataset we collected on 265 village councils in west bengal and rajasthan we compare the type of public goods provided in reserved and unreserved village councils we show that the reservation of a council seat affects the types of public goods provided specifically leaders invest more in infrastructure that is directly relevant to the needs of their own genders

districting and government overspending theories of government spending driven by a common pool problem in the fiscal revenues pool predict that greater districting of a political jurisdiction raises the scale of government this paper presents evidence on this and related predictions from a cross section of city governments in the united states the main finding is that when other plausible determinants of government spending are controlled for greater districting leads to a considerably greater scale of government activity the results also show that at large electoral systems do not and forms of government that concentrate powers in the office of the executive do break this relationship

earnings effects of labor organizations in 1890 analyzing data from extensive surveys of u s nonfarm families in 1889 90 predominantly families from eastern states the authors of this paper show that workers affiliated with labor organizations had earnings that were 22 percent higher than the earnings of other workers an effect comparable in magnitude to estimates for modern unions wage differentials varied considerably across the eight industries studied and across skill levels within each industry

strategic extremism why republicans and democrats divide on religious values party platforms differ sharply from one another especially on issues with religious content such as abortion or gay marriage given the high return to attracting the median voter why do vote maximizing politicians take extreme positions in this paper we find that strategic extremism depends on an intensive margin where politicians want to induce their core constituents to vote or make donations and the ability to target political messages toward those core constituents our model predicts that the political relevance of religious issues is highest when around one half of the voting population attends church regularly using data from across the world and within the united states we indeed find a nonmonotonic relationship between religious extremism and religious attendance

an economic model of representative democracy this paper develops an approach to the study of democratic policy making where politicians are selected by the people from those citizens who present themselves as candidates for public office the approach has a number of attractive features first it is a conceptualization of a pure form of representative democracy in which government is by as well as of the people second the model is analytically tractable being able to handle multidimensional issue and policy spaces very naturally third it provides a vehicle for answering normative questions about the performance of representative democracy

the role of party reputation in the formation of policy abstract this paper shows that a party can credibly establish a platform more moderate than the ideology of its members and thereby raise the probability that the party s nominee wins the election a lame duck incumbent optimally implements his party s platform in order to maintain his party s reputation for having a moderate platform this increases the likelihood that his party retains power when candidates credibly locate themselves in policy space via this mechanism we show that if candidates are sufficiently impatient then their policies are bounded away from one another the policy convergence result is not robust

the implications of competition among jurisdictions does tiebout need politics the paper investigates whether compensation among local jurisdiction is by itself sufficient to ensure efficient provision of local public goods jurisdictions have fixed boundaries and each has an entrenched government with the power to tax and supply the public good residents can move costlessly among jurisdictions it is shown that competition among numerous jurisdictions is not sificient to guarantee public sector efficiency though residents can vote with their feet land is immobile hence governments can unsurp some land rents for their own ends increasing the number of jurisdictions limits but cannot completely eliminate the ability to exercise discretionary governmental power

the endogeneity of union membership in a pay model cross section estimates of union nonunion pay differentials can be based either on models in which pay is determinied by a set of exogenous variables including union membership or on more complex models in which union membership and pay are jointly determined although several investigators have argued that the complex model is more appropriate they have rarely examined in depth the economic meaning and the statistical assumptions of their union membership and pay equations because their complex models may be misspecified it is not at all clear whether these models yield better or worse estimates of union nonunion pay differentials than the simpler models in which union membership is treated as exogenous the endogeneity of union membership in a model of cross section unionnonunion pay differentials can be based on at least four arguments first individuals choose to work in the union or nonunion sector depending on the pay and conditions of employment in each sector as well as their tastes for unionization 2 second union organizers choose particular firms or industries as unionization targets and among their choice criteria are relative or absolute rates of pay third employees deciding uni1on representation elections consider expected union and nonunion pay in casting their votes 3 fourth employers allocate the excess supply of labor at ulnion pay levels by selecting especially wellqualified workers the plausibility of these arguments is not sufficient reason to infer that the endogeneity of union membership in a current pay model is a good assumption with regard to the first argument it is important to note the limited sectoral mobility of many workers given the correlation between unionization and both occupation and location it is clear that many individuals long run occupational and residential choices essentially have placed them in either the union or nonunion sector in order to move from the union to the nonunion sector they would have to migrate or to sell skills for which they would not be highly rewarded for example a unionized teacher in the new york public

political parties and political shirking using ada roll call voting scores for the 1947 2006 period i find that senators shirk in their last term the degree of shirking is limited by political parties which constrain the politician in his last term and varies by post senate career choices the results highlight the importance of political parties in the repeated game that is electoral politics

party politics governors and economic policy in this article we evaluate the role of elections in governors state tax policy making does it matter for state taxes whether the governor is a democrat or republican and whether she is eligible for re election or faces a binding term limit using a regression discontinuity design and a panel of u s states we find that the manner in which governors of different parties implement different tax policies turns crucially on the incumbent s eligibility for re election re electable democratic governors increase income taxes relative to similarly situated republicans yielding divergence between party policy positions however governors facing a binding term limit exhibit the reverse policy difference resulting in a movement of policy back together

vulnerability to a currency crisis lessons from the asian experience are currency crises caused by manias and panics in financial markets or by unsustainable deteriorations in domestic macroeconomic conditions this question is explored in the context of the recent asian currency crisis the theoretical concept of vulnerability is used to identify three early warning indicators of susceptibility to a currency crisis rapid accumulation of mobile capital domestic lending booms and overvalued exchange rates it is shown that the crisis and noncrisis countries of asia may be distinguished empirically using these indicators over the decade preceding the crisis this exercise provides convincing evidence that the crisis emanated largely from domestic macroeconomic conditions

life expectancy and human capital investments evidence from maternal mortality declines longer life expectancy should encourage human capital accumulation since a longer time horizon increases the value of investments that pay out over time previous work has been unable to determine the empirical importance of this life expectancy effect due to the difficulty of isolating it from other effects of health on education we examine a sudden drop in maternal mortality risk in sri lanka between 1946 and 1953 which creates a sharp increase in life expectancy for school age girls without contemporaneous effects on health and which also allows for the use of boys as a control group using additional geographic variation we find that the 70 reduction in maternal mortality risk over the sample period increased female life expectancy at age 15 by 4 1 female literacy by 2 5 and female years of education by 4 0 authors

did women s suffrage change the size and scope of government this paper examines the growth of government during this century as a result of giving women the right to vote using cross sectional time series data for 1870 1940 we examine state government expenditures and revenue as well as voting by u s house and senate state delegations and the passage of a wide range of different state laws suffrage coincided with immediate increases in state government expenditures and revenue and more liberal voting patterns for federal representatives and these effects continued growing over time as more women took advantage of the franchise contrary to many recent suggestions the gender gap is not something that has arisen since the 1970s and it helps explain why american government started growing when it did

does gender matter for political leadership the case of u s mayors abstract what are the consequences of electing a female leader for policy and political outcomes we answer this question in the context of u s cities where women s participation in mayoral elections increased from negligible numbers in 1970 to about one third of the elections in the 2000 s a novel data set of u s mayoral elections from 1950 to 2005 was used and a regression discontinuity design was employed to deal with the endogeneity of female candidacy to city characteristics in contrast to most research on the influence of female leadership we find no effect of gender of the mayor on policy outcomes related to the size of local government the composition of municipal spending and employment or crime rates these results hold both in the short and the long run while female mayors do not implement different policies they do appear to have higher unobserved political skills as they have at least a 5 percentage point higher incumbent effect than a comparable male but we find no evidence of political spillovers exogenously electing a female mayor does not change the long run political success of other female mayoral candidates in the same city or of female candidates in local congressional elections

sources of growth revisited evidence from selected mena countries summary this paper reconsiders the a versus k debate namely which factor is the leading contributor to economic growth productivity gains a or factor accumulation k the growth accounting analysis is conducted for 10 middle eastern and north african mena countries over the period 1960 98 the long run share of capital in income is estimated using cointegration country specific and panel data region specific methods we find that for most of the countries in our sample the share of capital is much higher than the conventional share of 0 3 0 4 the growth accounting exercise conducted with the incorporation of human capital reveals that the contribution of productivity gains to growth is negligible and frequently even detrimental thus we conclude that it is factor accumulation that drives the economic performance of the mena economies

can mentoring help female assistant professors interim results from a randomized trial while much has been written about the potential benefits of mentoring in academia very little research documents its effectiveness we present data from a randomized controlled trial of a mentoring program for female economists organized by the committee for the status of women in the economics profession and sponsored by the national science foundation and the american economics association to our knowledge this is the first randomized trial of a mentoring program in academia we evaluate the performance of three cohorts of participants and randomly assigned controls from 2004 2006 and 2008 this paper presents an interim assessment of the program s effects our results suggest that mentoring works after five years the 2004 treatment group averaged 4 more nsf or nih grants and 3 additional publications and were 25 percentage points more likely to have a top tier publication there are significant but smaller effects at three years post treatment for the 2004 and 2006 cohorts combined while it is too early to assess the ultimate effects of mentoring on the academic careers of program participants the results suggest that this type of mentoring may be one way to help women advance in the economics profession and by extension in other male dominated academic fields this abstract was borrowed from another version of this item

diagnosing discrimination stock returns and ceo gender a vast labor literature has found evidence of a glass ceiling whereby women are under represented among senior management a key question remains the extent to which this reflects unobserved differences in productivity preferences prejudice or systematically biased beliefs about the ability of female managers disentangling these theories would require data on productivity on the preferences of those who interact with managers and on perceptions of productivity financial markets provide continuous measures of the market s perception of the value of firms taking account of the beliefs of market participants about the ability of the men and women in senior management as such financial data hold the promise of potentially providing insight into the presence of mistake based discrimination specifically if female headed firms were systematically under estimated this would suggest that female headed firms would outperform expectations yielding excess returns examining data on s p 1500 firms over the period 1992 2004 i find no systematic differences in returns to holding stock in female headed firms although this result reflects the weak statistical power of our test rather than a strong inference that financial markets either do or do not under estimate female ceos jel j7 g14 j44

credibility and policy convergence in a two party system with rational voters the traditional approach to modeling political parties behavior based upon the contribution of anthony downs 1957 assumes that the parties unique objective is to win elections thus they maximize their popularity the crucial implication of this assumption for a two party system is that if the two parties have the same information about voters preferences full convergence of policies results from electoral competition this is the crucial implication of the median voter theorem more generally it may be argued that different parties are motivated differently because they represent different constituencies parties may not care only about winning elections per se but also about the quality of the policies resulting from an election in this case the candidates of the two parties view winning an election not only as a goal per se but also as a means of implementing a better policy for their respective constituencies this paper shows that electoral competitions imply dynamic inconsistency if the voters are modeled as rational and forwardlooking agents and parties do not care exclusively about being elected but also about which policy to implement once elected the dynamic inconsistency arises as follows the parties have an incentive to announce convergent platforms to increase their chances of election however if the elected party is not committed to its electoral platform it has an incentive to follow its most preferred policy rather than the policy announced in its platform if voters are rational they account for this incentive thus in general in a one shot electoral game the only timeconsistent equilibrium is one in which no convergence is possible the two parties follow their most preferred policies and the voters rationally expect this outcome full convergence of parties platforms results only as a limiting case when the parties are completely indifferent with respect to the quality of the policies resulting from the election thus these results differ from the existing literature on ideologically motivated politicians for instance donald wittman 1977 1983 randall calvert 1985 which implicitly assumes the possibility of binding commitments to electoral platforms complete or partial policy convergence can be the outcome of political competition if the interaction between the parties and the voters is modeled as an infinitely repeated game in fact if the candidates have concave objective functions the welfare maximizing policy rule implies a complete convergence of parties policies however this cooperative and agreed upon policy may or may not be sustainable as a subgame perfect equilibrium depending on parameter values in particular it depends on the discount rates of the two parties the degree of polarization of their preferences and the relative popu graduate school of industrial administration carnegie mellon university pittsburgh pa 15213 and national bureau of economic research cambridge ma 02138 this paper is based upon a chapter of my unpublished doctoral dissertation at harvard university i am greatly indebted to jeffrey sachs for directing my attention toward these issues and for many conversations i also wish to thank andrew abel dilip abreu olivier blanchard ramon caminal andrew caplin alex cukierman morris fiorina benjamin friedman herschel grossman howard rosenthal and the referees for very useful comments the responsibilitv af anv n mtnkieis af calrirp nfnlv mine the result of policy convergence in a two party system is more general than the median voter theorem for discussions of convergence results not at the median see john ledyard 1984 peter coughlin 1984 coughlin and shmuel nitzan 1981 melvin hinich 1977 for earlier work on spatial competition see richard mckelvey 1975 hinich ledyard and peter ordeshook 1972 1973 and the references quoted therein the present paper focuses on the result of convergence rather than on the median voter theorem per se

do political parties matter evidence from u s cities are cities as politically polarized as states and countries no is the answer from our regression discontinuity design analysis which shows that whether the mayor is a democrat or a republican does not affect the size of city government the allocation of local public spending or crime rates however there is a substantial incumbent effect for mayors we investigate three mechanisms that could account for the striking lack of partisan impact at the local level and find the most support for tiebout competition among localities within metropolitan areas

does electoral accountability affect economic policy choices evidence from gubernatorial term limits this paper analyzes the behavior of u s governors from 1950 to 1986 to investigate a reputation building model of political behavior we argue that differences in the behavior of governors who face a binding term limit and those who are able to run again provides a source of variation in discount rates that can be used to test a political agency model we find evidence that taxes spending and other policy instruments respond to a binding term limit if a democrat is in office the result is a fiscal cycle in term limit states which lowers state income when the term limit binds

the causes of legal rents extraction evidence from spanish municipalities this paper analyzes the causes of legal political rent extraction by using a direct measure of it namely local top politicians wages in particular we investigate whether local politicians incentives to extract rents by setting their own wages are influenced by the degree of political competition and voter information we use a sample of the largest spanish municipalities over the years 2008 2010 the results indicate that weaker political competition and lesser voter information are related to more rent extraction in an additional analysis we show that higher wages do not ensure better financial management these findings confirm that when politicians can set their own salaries higher wages do not mean better management but they are just political rents

gender quotas and the quality of politicians we analyze the effects of the introduction of gender quotas in candidate lists on the quality of elected politicians as measured by the average number of years of education we consider an italian law which introduced gender quotas in local elections in 1993 and was abolished in 1995 as not all municipalities went through elections during this period we identify two groups of municipalities and use a difference in differences estimation we find that gender quotas are associated with an increase in the quality of elected politicians with the effect ranging from 0 12 to 0 24 years of education this effect is due not only to the higher number of elected women who are on average more educated than men but also to the lower number of low educated elected men the positive effect on quality is confirmed when we measure the latter with alternative indicators it persists in the long run and it is robust to controlling for political ideology and political competition

do parties matter for economic outcomes a regression discontinuity approach a long standing issue in political economics is to what extent party control makes a difference in determining fiscal and economics policies this question is very difficult to answer empirically because parties are not randomly selected to govern political entities this article uses a regression discontinuity design namely party control changes discontinuously at 50 of the vote share which can produce near experimental causal estimates of the effect of party control on economic outcomes the method is applied to a large panel data set from swedish local governments with a number of attractive features the results show that there is an economically significant party effect left wing governments spend and tax 2 3 more than right wing governments left wing governments also have 7 lower unemployment rates which is partly due to that left wing governments employ 4 more workers than right wing governments jel c21 d72 d78 h71 h72

does partisan affiliation impact the distribution of spending evidence from state governments expenditures on education abstract how and why does partisan affiliation impact policy using a regression discontinuity strategy and focusing on state education spending we find that democratic and republican governors allocate spending differently in particular school districts with higher shares of minority students receive larger state transfers than other districts under democratic governors a similar pattern occurs in state transfers to higher education institutions this is true regardless of whether the governor is eligible for reelection we find no evidence that democrat governors are simply sending money to areas with a larger share of democrats these results suggest that the observed policy divergence is driven by differences in preferences of elected candidates

business as usual politicians with business experience government finances and policy outcomes abstract are government finances and policy outcomes different under politicians with business experience we study california city councils and implement a regression discontinuity strategy to provide causal evidence on this issue ultimately we find no evidence that the election of a candidate with business experience impacts city expenditures revenues unemployment rates and other outcomes future vote shares for candidates with business experience are also unaffected which suggests that these politicians are not having an impact that is observed to voters but unobserved in our data

shift contagion vulnerability in the mena stock markets as part of a broader financial development reform agenda the middle east and north africa mena countries have successfully expanded and revitalised their stock markets over the last decade whereas previous contributions have investigated efficiency international integration and portfolio diversification opportunities very little is known about these markets vulnerability to external financial crises in this paper we investigate shift contagion to the mena region using a comprehensive battery of econometric tests for a number of different crises episodes the 1997 asian crisis the 1998 russian virus and its brazilian sequel the 2000 turkish collapse the 9 11 turmoil the 2001 argentinean crisis the 2002 enron worldcom scandal and the 2007 09 global financial crisis we found that turkey israel and jordan were the most vulnerable markets over the 1997 2009 period followed by tunisia morocco egypt and lebanon our results also highlight heterogeneous but increasing levels of sensitivity to external financial shocks especially during the recent global financial crisis from a financial point of view this suggests that mena based diversification strategies may be relatively inefficient during periods of global turmoil from an economic point of view our results suggest that stock market development also involves potential destabilisation costs this issue should be acknowledged and addressed by policymakers if these countries are to ensure a smooth transition towards international financial integration

party affiliation and public spending evidence from u s governors this paper investigates whether the party affiliation of governors democrat or republican has an impact on the allocation of state expenditures exploiting gubernatorial election results from 1960 to 2012 and a regression discontinuity design rdd we find that democratic governors allocate a larger share of their budget to health hospitals and education sectors we find no significant impact of the political party of governors on total spending only on the allocation of funds the results are robust to a wide range of controls and model specifications jel d72 h75 h72

the value of school facility investments evidence from a dynamic regression discontinuity design author s cellini stephanie riegg ferreira fernando rothstein jesse abstract despite extensive public infrastructure spending surprisingly little is known about its economic return in this paper we estimate the value of school facility investments using housing markets standard models of local public goods imply that school districts should spend up to the point where marginal increases would have zero effect on local housing prices our research design isolates exogenous variation in investments by comparing school districts where referenda on bond issues targeted to fund capital expenditures passed and failed by narrow margins we extend this traditional regression discontinuity approach to identify the dynamic treatment effects of bond authorization on local housing prices student achievement and district composition our results indicate that california school districts underinvest in school facilities passing a referendum causes immediate sizable increases in home prices implying a willingness to pay on the part of marginal homebuyers of 1 50 or more for each 1 of capital spending these effects do not appear to be driven by changes in the income or racial composition of homeowners and the impact on test scores appears to explain only a small portion of the total housing price effect c 2010 by the president and fellows of harvard college and the massachusetts institute of technology

union wage differentials in the public and private sectors a simultaneous equations specification the paper attempts to integrate new approaches to estimating union wage effects with the analysis of public private sector wage differentials estimates of the union differential in both public and private sectors allowing for the endogeneity of union status are presented the hypothesis that the recently measured rents to public sector employment primarily reflect the recent increase in unionization in that sector is examined and receives considerable empirical support there was evidence of positive selection into the union sector especially for private sector workers union status appears to be strongly influenced by the expected wage gain from joining the union sector

the president and the distribution of federal spending scholarship on distributive politics focuses almost exclusively on the internal operations of congress paying particular attention to committees and majority parties this article highlights the president who has extensive opportunities both ex ante and ex post to influence the distribution of federal outlays we analyze two databases that track the geographic spending of nearly every domestic program over a 24 year period the largest and most comprehensive panels of federal spending patterns ever assembled using district and county fixed effects estimation strategies we find no evidence of committee influence and mixed evidence that majority party members receive larger shares of federal outlays we find that districts and counties receive systematically more federal outlays when legislators in the president s party represent them

a natural experiment on discrimination in elections abstract we exploit a natural experiment to study discrimination in elections in illinois republican presidential primaries voters vote for delegates bound to presidential candidates but delegates names convey information about their race and gender we identify discrimination from variation in vote totals among delegates bound to the same presidential candidate and who face the same voters examining delegate vote totals from 2000 to 2016 we estimate nonwhite delegates receive 9 fewer votes we find essentially no gender discrimination negligible incentives for statistical discrimination costs to preferred presidential candidates and heterogeneity are consistent with an interpretation of this behavior as taste based

a new look at the union wage premium during the early years of the afl this study provides new evidence showing that the union wage premium in the late nineteenth century in the united states was lower than previously believed analysis of wage and productivity data from an 1890 survey of individual workers in maine yields a 9 2 union nonunion wage gap once correction is made for self selection bias the disproportionate representation in unions of workers who because of skills and other attributes would probably gain above average wages even in the absence of unions the author argues that business cycle conditions and distinctive union dynamics can affect the results of analyses that employ the heckman procedure a common procedure designed to correct for self selection bias

party control of state government and the distribution of public expenditures this paper examines the effects of party control of state governments on the distribution of intergovernmental transfers across counties from 1957 to 1997 we find that the governing parties skew the distribution of funds in favor of areas that provide them with the strongest electoral support this is borne out in two ways i counties that traditionally give the highest vote share to the governing party receive larger shares of state transfers to local governments ii when control of the state government changes the distribution of funds shifts in the direction of the new governing party we find only weak evidence that parties reward electorally pivotal counties or counties in electorally pivotal legislative districts finally we find that increased spending in a county increases voter turnout in subsequent elections this suggests that parties have an electoral incentive to skew the distribution of funds to influence future election results and the mechanism through which this works is mobilization rather than conversion of voters in a fixed electorate

incumbent performance and electoral control in the pure theory of electoral competition citizens compare the platforms of the candidates and vote for the one whose platform is preferred candidate strategies are identified with promises about future performance in office models of this sort have been developed in both static mckelvey 1975 and dynamic kramer 1977 i settings and all appear to have the property that if the set of alternatives is large enough in some sense equilibrium platforms rarely exist but these models have another feature that is quite as disturbing as their instability in the static setting discussed by mckelvey little attention is paid to the possibility that once in office the politician s preferences may diverge from those of his constituents and that he may therefore choose policies at variance from his platform instead it is simply assumed that promises will be kept whether or not such behavior is congruent with the interest of the officeholder it is sometimes argued that an enforcement mechanism may exist to discipline politicians for failing to keep promises but without a specification of the mechanism it is not obvious that it would be in the interests of the

is the international propagation of financial shocks non linear evidence from the erm abstract this paper tests for the presence of non linearities in the propagation of devaluation expectations among the countries that were members of the exchange rate mechanism of the ems we show that whenever it is possible to estimate a model for financial interdependence a full information technique to detect such non linearities is more efficient than the limited information estimator proposed in a similar context by rigobon 2000 this happens in particular when the periods of market turbulence are relatively short our evidence suggests that non linearities in the propagation of devaluation expectations were a general phenomenon in the erm normally the non linearity amounts to a stronger effect in the same direction but sometimes as in the dutch case it implies a significant effect in the opposite direction evidence of flight to quality

gender interactions within hierarchies evidence from the political arena this paper studies gender interactions within hierarchical organizations using a large data set on the duration of italian municipal governments elected between 1993 and 2003 a municipal government can be viewed as a hierarchy whose stability over time depends on the degree of cooperation between and within ranks we find that in municipalities headed by female mayors the probability of early termination of the legislature is higher this result persists and becomes stronger when we control for municipality fixed effects as well as for non random sorting of women into municipalities using regression discontinuity in gender mixed electoral races decided by a narrow margin the likelihood that a female mayor survives until the end of her term is lowest when the council is entirely male and in regions with less favourable attitudes towards working women this evidence is suggestive that group dynamics are an important factor in driving the gender difference other interpretations receive less support in the data our results may provide an alternative explanation for the underrepresentation of women in leadership positions

rational contagion and the globalization of securities markets this paper argues that globalization may promote contagion by weakening incentives for gathering costly information and by strengthening incentives for imitating arbitrary market portfolios in the presence of short selling constraints the gain of gathering information at a fixed cost may diminish as markets grow moreover if a portfolio manager s marginal cost for yielding below market returns exceeds the marginal gain for above market returns there is a range of optimal portfolios in which all investors imitate arbitrary market portfolios and this range widens as the market grows numerical simulations suggest that these frictions can have significant implications for capital flows in emerging markets

does personal background influence a finance minister to cook the books an investigation of creative accounting in swiss cantons abstractthis article aims to identify the factors influencing the use of creative accounting in the public sector its distinctive feature is that it sheds light on creative accounting when used not to hide public deficits but to conceal surpluses it especially explores the impact of the finance minister s fm s background on the phenomenon we take advantage of the quasi experimental settings of the swiss cantons in which the financial management act sets out the possibility of implementing certain accounting gimmicks including mainly additional depreciation charges these charges which are depreciations in name only enable the fm to artificially inflate expenses thus increasing the deficit or reducing the surplus our panel data set of the 26 cantons over the period 1980 2012 includes a new data set of creative accounting and of 116 cantonal fms our results indicate that the fms cook the books irrespective of their personal or ideological background with the exception that trained economists

the endogeneity of union status an empirical test an unsettled issue in the literature relating to the relative wage effect of unions is the appropriate treatment of union status in a wage determination model in the context of a three equation model determining union membership and union and nonunion sector wage rates this paper presents an instrumental variables iv procedure for estimating the parameters of the wage equations and a test of the exogeneity of union status using the hausman specification test an advantage of our iv procedure in comparison to the widely used inverse mill s ratio procedure is that our procedure is a distribution free estimator whereas the inverse mill s ratio estimator hinges in the assumption that the error term of the choice equation is normally distributed using data for a sample of middle aged white workers we estimate the parameters of the union and nonunion wage equations with both procedures on the key question of the endogeneity of union status the hausman test decisively rejects the null hypothesis of exo

women prefer larger governments growth structural transformation and government size i introduction in developing and developed economies alike growth of income per capita is generally accompanied by a rise in the share of government expenditure in gross domestic product gdp as well as an increase in the participation of women in the labor force we argue that these phenomena are causally related propose a model that motivates that relation and provide evidence in its support the share of total government spending in gdp has increased by 10 in organization for economic cooperation and development oecd countries in the last two decades alone see world bank 2001 and this rise comes in the wake of significant secular increases in government spending in the 20th century 1 apace with this rise in the government s share of gdp female labor force participation has also risen from 28 to 41 in the same countries and the same period 2 as for the long run goldin 1995 reports an increase in female labor force participation in the united states between 1900 and 1980 from 3 1 to 50 of the labor force 3 while according to tanzi and schuknecht 2000 the share of government spending rose in the same period from 8 to 30 figure 1 plots the change in government size as a share of gdp versus the change in female labor force participation from 1972 to 1999 for a sample of selected countries the twin increases in female labor force participation and government size are not a coincidence they are causally related the mechanism at work is twofold as wages rise with development and women choose to work more hours in the market they increase their demand for services that tend to be provided by the government including education healthcare care for the elderly and the unemployed the additional provision of government services further encourages female labor market participation as it decreases the time necessary to perform those home and family activities whose burden falls disproportionately on women 4 this circle of causation leads to higher female participation and larger governments our growth model extends galor and weil 1996 in addition to female participation in market activities fertility and output government size is also endogenously determined the rise in hourly wages that accompanies development and capital accumulation leads to an increase in female labor force participation as the opportunity cost of caring for the children increases in our model government spending decreases the time cost of performing household chores one obvious connection is the provision of extra school hours and child care which decrease the time cost of child rearing as couples women in particular participate more in market activities they choose higher government spending to compensate for time spent in the market under certain conditions which we make explicit they also choose higher tax rates with the result that female labor force participation and government size increase apace 5 as female labor force participation leads to a larger government the total cost of raising children is reduced for two reasons the total time at home decreases and the time cost per child also falls as public spending partly substitutes for home production of child care education and other activities 6 the decision to work outside the home is likely to lead women to demand wider and better provision of the public services that alleviate their unequal burden as caregiver at home in addition the role of women as insurer of family risks may lead to a demand for more government intervention as women become less present at home there is an additional mechanism through the composition of the public labor force government jobs in teaching and health which are a large portion of total public jobs tend to be filled mostly by women 7 our model draws on the solid literature on growth fertility and female labor force participation which is supported by microevidence

the tiebout model bring back the entrepreneurs several recent papers in the literature have reformulltlated the nature of equilibrium in ifiebout mo lels by alssliuim ing an exogenous number of communities inflexible commullity l ou alaries anti in pirticular inactive lantlowners and developers ihis paper argues that these assumptions are unwarranted and resul1t iin in eterminate solutions and incorrect analyses determinate lon1g run1 solutions require equilibrium in intercommui land markets which in turn require giving lantlowners and or entrepreneurial leveloelers an active role in the models the role of politics in these models and its juxtaposition with entrepreneurial activities are also analyzed

preferences for redistribution in the land of opportunities this paper explores how individual preferences for redistribution depend on future income prospects in addition to estimating the impact of individuals socioeconomic background and of their subjective perceptions of future mobility we employ panel data to construct dobjectivet measures of expected gains and losses from redistribution for different categories of individuals we find that such measures have considerable explanatory power and perform better than dgeneral mobilityt indexes we also find that preferences for redistribution respond to individual beliefs on what determines one s position in the social ladder ceteris paribus people who believe that the american society offers equal opportunities are more averse to redistribution d 2004 published by elsevier b v

turnout and closeness evidence from 60 years of bavarian mayoral elections one prediction of the calculus of voting is that electoral closeness positively aects turnout via a higher probability of one vote being decisive i test this theory with data on all mayoral elections in the german state of bavaria between 1946 and 2009 importantly i use constitutionally prescribed two round elections to measure electoral closeness and thereby improve on existing work that mostly uses expost measures that are prone to endogeneity the results suggest that electoral closeness matters a one standard deviation increase in closeness increases turnout by 1 68 percentage points which corresponds to 1 of a standard deviation in this variable i also evaluate how other factors like electorate size or rain on election day aect turnout dierentially depending on the closeness of the race

gender gaps in policy making evidence from direct democracy in switzerland this paper uses a unique data set on individual voting decisions to shed new light on gender gaps in policy making our analysis focuses on switzerland the world leader in direct democracy where all citizens directly decide on a broad range of policies at the ballot box analysing all federal votes held between 1981 and 2003 we show that there are large gender gaps in the areas of health environmental protection defence spending and welfare policy the gender gaps typically persist even conditional on socio economic characteristics we also find that female policy makers have a substantial effect on the composition of public spending but a small effect on the overall size of government

some contagion some interdependence more pitfalls in tests of financial contagion this paper develops a test of contagion in financial markets based on bivariate correlation analysis which generalizes existing tests and applies it to the international effects of the hong kong stock market crisis of october 1997 contagion is defined as a structural break in the international transmission of financial shocks for plausible values of the variance of country specific shocks in hong kong our test finds evidence of contagion for 5 countries out of a sample of 17 this is in sharp contrast with the findings of recent literature according to which there is no contagion only interdependence we show that this strong result in the literature is due to arbitrary and unrealistic restrictions on the variance of country specific shocks

the union wage effect in late nineteenth century britain this paper gives a historical dimension to the impact of trade unions on earnings by estimating the union wage effect in britain between 1889 90 using data from the us commissioner of labour survey conducted at that time the determinants of union status are also investigated in terms of profit estimation using individual characteristics which may be correlated with union membership the results of this first stage are used in the computation of selectivity corrected estimates of the union wage effect it is found that the effect of union membership on earnings at this time was in the order of 15 20 for a range of different skill levels

women and power unpopular unwilling or held back we use spain s equality law to test for the existence of agency problems between party leaders and their constituents the law mandates a 40 percent female quota on electoral lists in towns with populations above 5 000 using pre and postquota data by party and municipality we implement a triple difference design we find that female quotas resulted in slightly better electoral results for the parties that were most affected by the quota our evidence shows that party leaders were not maximizing electoral results prior to the quota suggesting the existence of agency problems that hinder female representation in political institutions

unions and relative real wages much attention has been focused recently on the effects of unions on economic stability resource allocation and income distribution almost always the discussion begins with the effects of unions on labor earnings or wages yet substantial agreement on the magnitude of the effect of unions on wages or earnings hardly seems close at hand among other studies on this subject it is noted that the classic study by h gregg lewis estimates a union nonunion wage differential of about 10 15 percent in 1957 58 leonard weiss estimates about the same differential as lewis and victor fuchs frank stafford adrian throop and orley ashenfelter and george johnson estimate a much larger differential the question such studies should attempt to answer is whether and how much union membership increases wages facing individuals holding constant other things such as education race sex age and occupation the studies mentioned above are not entirely appropriate to answer this question for example some suffer from a potentially severe aggregation bias in examining average wages or earnings and the percentage of the labor force unionized and or fail to disaggregate by race and sex those that attempt to examine opportunities facing individuals are forced to employ data on earnings rather than wages and thereby build at least partially voluntary labor supply and demand decisions into their estimates the purpose of this paper is to present new evidence on the relative wages of union and nonunion workers by applying recent advances in the hedonic method of price measurement to a new and rich source of data on individual workers in section i an equation relating wages to personal characteristics is developed which focuses on union membership and its interaction with race sex occupation and geographical area the equation extends work in this area by robert hall in section ii a brief discussion of the data is presented together with empirical estimates of the union nonunion wage differential formal tests are made of some interesting hypotheses about the pattern of the relative wages of union and nonunion workers by race sex occupation and geographical area the results are in much closer accord with the estimates of lewis and weiss than those of fuchs stafford and throop in section iii some concluding remarks are offered including some observations on the limitations of this type of study

single party rule public spending and political rents evidence from finnish municipalities in this paper i investigate the differences in public spending and extraction of political rents between single party and coalition governments common pool theories predict that coalitions tend t

evidence on electoral accountability in the u s senate are unfaithful agents really punished many have questioned whether voters are able to hold incumbent officials electorally accountable through a retrospective voting strategy we examine u s senate elections from 1962 to 1990 in forty one states explaining which incumbents ran for reelection and their success in seeking reelection we find that an incumbent s deviation from her state party platform decreases the probability that she will run for reelection and win if she runs furthermore the electoral mechanism is found to be more efficient when voters are better informed finally we find that our divergent party platform model provides a better fit than the median voter model

do voters affect or elect policies evidence from the u s house there are two fundamentally different views of the role of elections in policy formation in one view voters can affect candidates policy choices competition for votes induces politicians to move toward the center in this view elections have the effect of bringing about some degree of policy compromise in the alternative view voters merely elect policies politicians cannot make credible promises to moderate their policies and elections are merely a means to decide which one of two opposing policy views will be implemented we assess which of these contrasting perspectives is more empirically relevant for the u s house focusing on elections decided by a narrow margin allows us to generate quasi experimental estimates of the impact of a randomized change in electoral strength on subsequent representatives roll call voting records we find that voters merely elect policies the degree of electoral strength has no effect on a legislator s voting behavior for example a large exogenous increase in electoral strength for the democratic party in a district does not result in shifting both parties nominees to the left politicians inability to credibly commit to a compromise appears to dominate any competition induced convergence in policy

federal tax policies congressional voting and natural resources can abundance of natural resources affect legislators voting behavior over federal tax policies we construct a political economy model of a federalized economy with district heterogeneity in natural resource abundance the model shows that representatives of natural resource rich districts are more less willing to vote in favor of federal tax increases decreases this occurs because resource rich districts are less responsive to federal tax changes due to the immobile nature of their natural resources we test the model s predictions using data on roll call votes in the u s house of representatives over the major federal tax bills initiated during the period of 1945 2003 in conjunction with the presence of active giant oil fields in u s congressional districts our identification strategy rests on plausibly exogenous giant oil field discoveries and exploitation and narrative based aggregate federal tax shocks that are exogenous to individual congressional districts and legislators we find that i resource rich congressional districts are less responsive to changes in federal taxes ii representatives of resource rich congressional districts are more less supportive of federal tax increases decreases controlling for legislator congressional district and state indicators our results indicate that resource richness is approximately half as dominant as the main determinant namely party afiliation in driving legislators voting behavior over federal tax policies

transmission of shocks and contagion from u s to mena equity markets the role of oil and gas markets abstract using a multifactor model augmented with oil and gas returns this paper examines contagion from the us to mena equity markets and studies the role of energy price fluctuations in amplifying the dependence between the us and mena equity markets we provide empirical evidence of a strong contagion effect originating from the us to mena equity markets the regional oil and gas factors account for the bulk of the variance of the mena equity returns and our findings suggest that the oil and gas markets play an important role in strengthening the dependence between the mena and us markets during episodes of market turmoil we discuss the policymaking importance of our results and propose a strategy to curb the adverse effects of us return shocks on mena equity markets during episodes of stress

why have women become left wing the political gender gap and the decline in marriage the last three decades have witnessed the rise of a pohtical gender gap in the united states wherein more women than men favor the democratic party we trace this development to the decline in marriage which we posit has made men richer and women poorer data for the united states support this argument first there is a strong positive correlation between state divorce prevalence and the political gender gap higher divorce prevalence reduces support for the democrats among men but not women second longitudinal data show that following marriage divorce women are less more likely to support the democratic party

flip flopping from primaries to general elections abstract i consider a model in which candidates must win a primary election to compete in the general election candidates may choose different policies in the primary and the general election but doing so results in accusations of flip flopping i show that candidates adopt extreme policies in the primaries but then try to move closer to the center for the general election even though primary voters are forward looking and anticipate this policy moderation the extent to which candidates move closer to the center is constrained by flip flopping costs and candidates choose divergent policies in the general election i obtain comparative statics results on candidate policy choices in terms of voter preferences