local government structure and public expenditures the law of 1 n postulates a positive relationship betweenthe number of democratically electedrepresentative districts and governmentspending strong support for thisrelationship exists in legislatures in theunited states at both the state andnational level and across countries fewstudies have examined this relationship atthe local level despite the fact that localgovernments operate under constraintssimilar to those faced by representativelegislatures using a sample of georgiacounties we find the number of countycommissioners to be positively correlatedwith county government expenditures indicating support for the law of 1 nat the local level

reconciling the old and new census bureau education questions recommendations for researchers beginning with the 1990 census and the january 1992 current population survey cps the bureau of the census changed the emphasis of its educational attainment question from years of education to degree receipt using a matched sample from the 1991 and 1992 march cps this article addresses how to reconcile the old and new questions the effects of those methods on the estimated return s to education are then examined both the estimated linear return and the estimated college high school wage differential are slightly larger using information from the new question

citations and incentives in academic contests i consider a contest between scholars on the basis of three popular indices of citation there exist equilibria in which there are more and better quality papers in the total citations contest than in the h index contest in some cases the total citations contest yields the same quality of papers but more papers than the euclidean contest as the cost of writing a paper increases the h index is inferior to the total citations index in both the quality and quantity of papers this result is partly driven by how the number of papers constrains how the h index counts citations jel d72

the effect of legislature size on public spending evidence from a regression discontinuity design what is the effect of legislature size on public spending an answer to this question is provided by weingast et al j polit econ 89 4 642 664 1981 whose law of 1 n posits that an increase in the number of elected representatives always leads to an increase in public spending because elected politicians regard the tax base as a common pool from which they can finance specific projects for their constituencies and these specific constituencies internalize the full benefits of the projects but only bear a fraction of the costs projects are financed from the common tax base fiscal inefficiency will increase with the number of representatives in this paper i test the validity of the law of 1 n using a dataset of 9325 german municipalities between 2008 and 2010 through the application of a regression discontinuity design many of the methodological pitfalls of previous studies can be avoided and a valid estimation of the causal effect of legislature size on public spending for german municipalities can be determined the results do not corroborate the positive findings of previous studies which generally supported the implications of the law of 1 n for the years 2008 2010 i find a negative effect of legislature size on public spending in german municipal councils

skill biased technological change and rising wage inequality some problems and puzzles the recent rise in wage inequality is usually attributed to skill biased technical change sbtc associated with new computer technologies we review the evidence for this hypothesis focusing on the implications of sbtc for overall wage inequality and for changes in wage differentials between groups a key problem for the sbtc hypothesis is that wage inequality stabilized in the 1990s despite continuing advances in computer technology sbtc also fails to explain the evolution of other dimensions of wage inequality including the gender and racial wage gaps and the age gradient in the return to education

supermajority rule and the law of 1 n this paper investigates the impact of a supermajority rule on the law of 1 n which posits that a larger number of districts increases the size of government our analysis suggests that supermajority rule despite the claim that it restrains excessive spending increases the 1 n effect because qualified majorities require logrolling to attract additional members using data from us states from 1970 to 2007 we find that the adoption of a supermajority rule has a robust worsening effect on the fiscal commons problem identified by the law of 1 n

local intergovernmental competition and the law of 1 n this article proposes an empirical framework based on a synthesis of the seminal law of 1 n and leviathan theories which models the relationship between government spending and the number of jurisdictions in a federal system as determined by the interplay of the costs related to centralized government which fall as the number of jurisdictions increases and the costs of distributive politics which rise as the number of jurisdictions increases using a panel of u s state and local government spending data empirical tests based on this combined framework show that the effect of intergovernmental competition predicted by the leviathan model is partially offset by the law of 1 n this result helps explain the inconsistent findings in the previous empirical literature

standing tiebout on his head tax capitalization and the monopoly power of local governments much of the public finance literature argues that localgovernments behave competitively due to residents ease of exitand entry the model presented here challenges this widespreadconclusion though it is costless to relocate to anotherlocality the presence of tax capitalization makes it impossiblefor land owners to avoid monopolistic pricing of public servicesby moving land owners can only choose between paying the taxdirectly or paying it indirectly in the form of a lower sale valuefor their housing if they exit in consequence the only realcheck on local governments comes through imperfectly functioningelectoral channels

the law of 1 n revisited distributive politics legislature size and the costs of collective action the foundational model of distributive politics predicts a positive relationship between the number of legislative districts and the level of inefficiency of projects approved by the legislature weingast shepsle and johnsen s law of 1 n this relationship has been tested extensively in the empirical literature with mixed results this article presents a model wherein passing the omnibus legislation typical of distributive politics is a costly process the model predicts a nonlinear relationship between legislature size and spending as increasing the size of the legislature also increases the costs of collective action results from an empirical exercise based on u s state legislatures 1962 2014 are consistent with the proposed model showing a 1 n effect which diminishes at the margin as the legislature s size increases especially in the lower chamber

new evidence on cyclical variation in average labor costs in the united states we provide new evidence on the cyclicality of employers real labor costs using bls establishment job data for the 1982 2018 period average straight time wages have become countercyclical since th

the law of k n the effect of chamber size on government spending in bicameral legislatures recent work in political economics has examined the positive relationship between legislative size and spending which weingast et al 1981 formalized as the law of 1 n however empirical tests of this theory have produced a pattern of divergent findings the positive relationship between seats and spending appears to hold consistently for unicameral legislatures and for upper chambers in bicameral legislatures but not for lower chambers we bridge this gap between theory and empirics by extending weingast et al s model to account for bicameralism in the context of a baron ferejohn bargaining game our comparative statics predict and empirical data from u s state legislatures corroborate that the size of the upper chamber n is a positive predictor of expenditure whereas the ratio of lower to upper chamber seats k exhibits a negative effect we refer to these relationships as the law of k n as the two variables influence spending in opposite directions

changing the price of pork the impact of local cost sharing on legislators demands for distributive public goods abstract the provision of public services through national legislatures gives legislators the chance to fund locally beneficial public projects using a shared national tax base nationally financed and provided local congestible public goods will be purchased at a subsidized price below marginal cost and may be inefficiently too large as a consequence an important assumption behind this inefficiency is that national legislators in fact demand more of the locally beneficial project as the local price for projects declines this paper provides the first direct test of this important assumption using legislators project choices following the passage of the water resources development act of 1986 wrda 86 we find legislators chosen water project sizes do fall as the local cost share rises with a price elasticity of demand ranging from 0 81 for flood control and shoreline protection projects to 2 55 for large navigation projects the requirement of wrda 86 that local taxpayers contribute a greater share to the funding of local water projects reduced overall proposed project spending in our sample by 35 and the federal outlay for proposed project spending by 48

computerisation and wage dispersion an analytical reinterpretation the rich countries have recently seen a dramatic rise in income inequality all the more surprising because the long term trend had been toward equality this paper examines one of the leading explanations computerisation in the workplace i offer a theory of computers impact on white collar work which goes far toward explaining the timing form and locus of recent labour market changes the theory looks at the bureaucratic and organisational applications of computers that have been first largest and most influential they have two effects on firms demand for labour at different skill levels

willingness to pay compensating variation and the cost of commitment hicksian welfare theory is static in nature but many decisions are made in a dynamic environment we present a dynamic model of an agent s decision to purchase or sell a good under the realistic conditions of uncertainty irreversibility and learning over time her willingness to pay wtp contains both the intrinsic value of the good as in hicksian theory plus a commitment cost associated with delaying to obtain more information the hicksian equivalence between wtp willingness to accept wta and compensating and equivalent variations no longer holds the wtp and wta divergence may arise and observed wtp values are not always appropriate for welfare analysis jel d60 d83

your right arm for a publication in aer the time tradeoff tto method is popular in medical decision making for valuing health states we use it to elicit economists preferences for publishing in top economic journals and living without limbs the economists value the journals highly and have a clear preference between them with american economic review aer the most preferred their responses imply they would sacrifice more than half a thumb for publishing in aer the tto results are consistent with ranking and willingness to pay results and indicate that preferences for journals are neither guided by influence factors nor by expectations of a resulting salary rise

tests of institutional versus non institutional models of local public expenditure determination are institutional or non institutional factors more important determinants of local public expenditure decisions employing data that allows us to directly identify the entire distribution of voter expenditure demands we estimate models of deviations of actual expenditures from the expenditure demand of defensible benchmarks namely the median voter s expenditure demand and the mean of voters expenditure demands three competing paradigms are employed to specify these models namely a non institutional model the reform government movement s explanation of how institutions affect local government decisions and a transactions cost model of this same phenomenon predictions from these three competing models differ in many respects comparisons of results from estimating models of expenditure deviations are found to be generally more consistent with the non institutional model than with either of the two institutional models these results suggest that a competitive local public service market helps limit the ability of governments to tax and spend in excess of the demands of the median or mean voter

the political economy of benefits and costs a neoclassical approach to distributive politics this essay offers a rational political explanation for the notorious inefficiency of pork barrel projects with an optimization model of legislative behavior and legislative institutions the model emphasizes the economically arbitrary from a welfare point of view importance of the geographic incidence of benefits and costs owing to the geographic basis for political representation we explore the implications of a legislator s objective function and derive conditions under which a representative legislature will select an omnibus of projects each of which exceeds the efficient scale

does the size of the legislature affect the size of government evidence from two natural experiments this paper makes use of regression discontinuity designs to estimate the effect of the number of legislators on the size of government the results indicate a negative effect i e the larger the size of the legislature the smaller is the size of government this runs counter to conventional wisdom one potential explanation is that more legislators can better control a budget maximizing bureaucracy i present evidence that is consistent with the proposed mechanism

tracking the returns to education in the 1990s bridging the gap between the new and old current population survey education items the current population survey cps is used for many studies examining trends in the returns to education the cps changed its education item in 1992 this paper develops adjustment factors for earnings at different education levels to make pre and post 1992 earnings comparable to accomplish this contradictory results from alternative data sources are analyzed and to the extent possible reconciled the adjustments reduce the estimated growth in the college high school earnings ratio between 1989 and 1993 by between 29 and 48 percent for men and between 44 and 73 percent for women

deviations from constituent interests the role of legislative structure and political parties in the states this paper investigates the determinants of state spending over 1960 1990 recent empirical studies suggest that state government expenditure is greater than the electorate desires our main finding is that expenditure was positively related to the number of seats in a state s legislature this is consistent with the hypothesis that logrolling leads representatives to spend more than their constituents would like we also find that political parties do not have a pronounced effect on overall levels of expenditure but do influence the composition of spending in particular democratic control of state government is associated with higher levels of welfare spending

the flypaper effect identifying areas for further research the flypaper effect literature dates back three decades it is overwhelmingly neo classical in approach attempting to improve the median voter demand model and or temper it with public choice supply side perspectives whilst this approach provided valuable early substantial analytical insights more recent papers seem to have contributed only marginally to an understanding of the flypaper effect if indeed it exists at all hence as well as providing a long overdue comprehensive review of the literature on the flypaper effect this paper identifies more productive avenues for further research

the choice of municipal government structure and public expenditures numerous empirical studies have attempted to measure the effect of varying government structures on public expenditures i argue that these prior may have produced biased estimates as they are predicated on the assumption that government structures are exogenous

overlapping jurisdictions substitutes or complements this paper presents a simple model of the demand relationship between the activities undertaken by overlapping governments and uses the framework to estimate the relationship between municipal and county expenditures the empirical results reveal a complementary relationship between county and city general expenditures any public sector expansion effects of monopoly power at the county level will therefore be reinforced by greater municipal spending further expanding the total size of the local public sector on the other hand changes in county police and roads expenditures appear to have no strong stable impact on municipal police and roads expenditures respectively providing no reinforcing or offsetting municipal spending responses to decisions at the county level

new estimates for wage rate inequality using the employment cost index the employment cost index measures the change in wage rates for a fixed set of jobs over time the separate indices for industry and occupation groups grew at varying rates during the 1980s however their growth rates have been much more similar since then which implies that the increase in the wage rates of low wage workers relative to middlewage workers during the 1990s was due to changes in the mix of jobs had all workers remained in their jobs the relative wage of low wage to middle wage workers would have remained constant

rank regressions wage distributions and the gender gap in this paper we propose a novel rank based procedure to decompose changes in the gender wage gap into three components changes in the skill distribution changes in the wage structure and improvements in the position of women in a distribution of reference using cps data from 1979 and 1991 we perform the decomposition at each percentile of the wage distribution and show that the results are sensitive to the choice of distribution of reference male versus overall wage distribution we also find that relative wage gains of women may have been a source of increasing wage inequality among men

legislative organization and government spending cross country evidence abstract the law of 1 n posits that an increase in the number of elected representatives fuels excessive government spending despite its wide acceptance as a stylized fact the law of 1 n has received only limited empirical scrutiny and the existing evidence for the american states provides mixed support for the thesis this paper examines the law of 1 n in bicameral and unicameral legislative structures using a cross section of democratic countries the results indicate that legislative size matters under both legislature structures but bicameralism dampens the 1 n effect relative to unicameralism

short versus long coalitions electoral accountability and the size of the public sector this article examines the policy consequences of the number of parties in government we argue that parties externalize costs not borne by their support groups larger parties thus internalize more costs than small parties because they represent more groups this argument implies that the public sector should be larger the more parties there are in the government coalition we test this prediction using yearly time series cross sectional data from 1970 to 1998 in 17 european countries we find that increasing the number of parties in government increases the fraction of gdp accounted for by government spending by close to half a percentage point or more than one billion current dollars in the typical year we find little support for the alternative claim that the number of legislative parties affects the size of the public sector except via the number of parties in government

sugar co operatives in maharashtra a political economy perspective abstract the origins of the powerful sugar lobby in maharashtra date back to the 1950s post independence cooperatives formed an integral part of the congress vision of rural development with local initiative a special status was accorded to the sugar cooperatives and the government assumed the role of a mentor by acting as a stakeholder guarantor and regulator persistence of the maze of regulations instituted five decades ago despite its stated rationale being thwarted suggests that it is maintained by entrenched vested interests this paper calls for a fresh start with minimal regulations the teething problems and initial market failures that may occur cannot be worse than the continuing saga of government failure

the impact of government structure on local public expenditures though the relationship between local government structure and expenditure has received considerable attention there is little consensus as to how the features of representative government affect local expenditure an exception is city council size which has consistently been found to be positively related to spending previous results rely on cross sectional estimation which may be subject to omitted variable bias this paper analyzes three components of municipal governments the form of government the size of the city council and the election method of city councilors once fixed effects estimation is employed the positive relationship between city council size and expenditure disappears