American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 4 3 August 2012 http://www.aeaweb.org/issue.php?journal=POL&volume=4&issue=3 Journal Article Front Matter i vi http://www.aeaweb.org/articles.php?doi=10.1257/pol.4.3.i 10.1257/pol.4.3.i American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 4 3 August 2012 http://www.aeaweb.org/issue.php?journal=POL&volume=4&issue=3 Journal Article Distributive Politics and Electoral Incentives: Evidence from Seven US State Legislatures Toke S.AidtU Cambridge and CESifo, Munich JuliaShvetsU Cambridge 1 29 We study the effect of electoral incentives on the allocation of public services across legislative districts. We develop a model in which elections encourage legislators to cater to parochial interests and thus aggravate the common pool problem. Using unique data from seven US states, we study how the amount of funding that a legislator channels to his district changes when he faces a term limit. We find that legislators bring less pork to their district when they cannot seek re-election. Consistent with the Law of 1/N, this last term reduction in funding is smaller in states with many legislative districts. (JEL D72, H70) http://www.aeaweb.org/articles.php?doi=10.1257/pol.4.3.1 10.1257/pol.4.3.1 http://www.aeaweb.org/aej/pol/data/2010-0124_data.zip http://www.aeaweb.org/aej/pol/app/2010-0124_app.pdf American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 4 3 August 2012 http://www.aeaweb.org/issue.php?journal=POL&volume=4&issue=3 Journal Article Surviving the Global Financial Crisis: Foreign Ownership and Establishment Performance LauraAlfaroHarvard U Maggie XiaoyangChenGeorge Washington U 30 55 We examine the differential response of establishments to the recent global financial crisis with particular emphasis on the role of foreign ownership. Using a worldwide establishment panel dataset, we investigate how multinational subsidiaries around the world responded to the crisis relative to local establishments. We find that, first, multinational subsidiaries fared on average better than local counterfactuals with similar economic characteristics. Second, among multinational subsidiaries, establishments sharing stronger vertical production and financial linkages with parents exhibited greater resilience. Finally, in contrast to the crisis period, the effect of foreign ownership and linkages on establishment performance was insignificant in noncrisis years. (JEL F23, G01, L22, M16) http://www.aeaweb.org/articles.php?doi=10.1257/pol.4.3.30 10.1257/pol.4.3.30 http://www.aeaweb.org/aej/pol/data/2010-0106_data.zip American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 4 3 August 2012 http://www.aeaweb.org/issue.php?journal=POL&volume=4&issue=3 Journal Article The Redistributional Impact of Nonlinear Electricity Pricing SeverinBorensteinU CA, Berkeley 56 90 Electricity regulators often mandate increasing-block pricing (IBP)--i.e., marginal price increases with the customer's average daily usage--to protect low-income households from rising costs. IBP has no cost basis, raising a classic conflict between efficiency and distributional goals. Combining household-level utility billing data with census data on income, I find that IBP in California results in modest wealth redistribution, but creates substantial deadweight loss relative to the transfers. I also show that a common approach to studying income distribution effects by using median household income within census block groups may be misleading. (JEL D31, L11, L51, L94, L98, Q41, Q48) http://www.aeaweb.org/articles.php?doi=10.1257/pol.4.3.56 10.1257/pol.4.3.56 http://www.aeaweb.org/aej/pol/data/2010-0085_data.zip http://www.aeaweb.org/aej/pol/app/2010-0085_app.pdf American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 4 3 August 2012 http://www.aeaweb.org/issue.php?journal=POL&volume=4&issue=3 Journal Article Cracks in the Melting Pot: Immigration, School Choice, and Segregation Elizabeth U.CascioDartmouth College Ethan G.LewisDartmouth College 91 117 We examine whether low-skilled immigration to the United States has contributed to immigrants' residential isolation by reducing native demand for public schools. We address endogeneity in school demographics using established Mexican settlement patterns in California and use a comparison group to account for immigration's broader effects. We estimate that between 1970 and 2000, the average California school district lost more than 14 non-Hispanic households with children to other districts in its metropolitan area for every 10 additional households enrolling low-English Hispanics in its public schools. By disproportionately isolating children, the native reaction to immigration may have longer-run consequences than previously thought. (JEL H75, I21, J15, J24, J61, R23) http://www.aeaweb.org/articles.php?doi=10.1257/pol.4.3.91 10.1257/pol.4.3.91 http://www.aeaweb.org/aej/pol/data/2010-0239_data.zip http://www.aeaweb.org/aej/pol/app/2010-0239_app.pdf American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 4 3 August 2012 http://www.aeaweb.org/issue.php?journal=POL&volume=4&issue=3 Journal Article Does State Fiscal Relief during Recessions Increase Employment? Evidence from the American Recovery and Reinvestment Act GabrielChodorow-ReichU CA, Berkeley LauraFeivesonMIT ZacharyLiscowU CA, Berkeley William GuiWoolstonStanford U 118 45 The American Recovery and Reinvestment Act (ARRA) of 2009 included $88 billion of aid to state governments administered through the Medicaid reimbursement process. We examine the effect of these transfers on states' employment. Because state fiscal relief outlays are endogenous to a state's economic environment, OLS results are biased downward. We address this problem by using a state's prerecession Medicaid spending level to instrument for ARRA state fiscal relief. In our preferred specification, a state's receipt of a marginal $100,000 in Medicaid outlays results in an additional 3.8 job-years, 3.2 of which are outside the government, health, and education sectors. (JEL H75, I18, I38, R23) http://www.aeaweb.org/articles.php?doi=10.1257/pol.4.3.118 10.1257/pol.4.3.118 http://www.aeaweb.org/aej/pol/data/2010-0254_data.zip http://www.aeaweb.org/aej/pol/app/2010-0254_app.pdf American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 4 3 August 2012 http://www.aeaweb.org/issue.php?journal=POL&volume=4&issue=3 Journal Article Fast-Track Authority and International Trade Negotiations PaolaConconiECARES, Free U Brussels GiovanniFacchiniErasmus U Rotterdam and U Milan MaurizioZanardiECARES, Free U Brussels 146 89 We develop a simple model of trade relations in which legislators with different stakes in import-competing and export industries decide whether to grant fast-track authority (FTA) to the president, giving up the power to amend international trade agreements. We show that strategic delegation motives are key to understanding FTA votes, which involve a decision between alternative country representatives: the executive or the majority in Congress. We then examine the determinants of all votes by US congressmen on FTA since the introduction of this institutional procedure in 1974. Our empirical analysis provides strong support for the predictions of the model. (JEL D72, F12, F13) http://www.aeaweb.org/articles.php?doi=10.1257/pol.4.3.146 10.1257/pol.4.3.146 http://www.aeaweb.org/aej/pol/data/2010-0216_data.zip American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 4 3 August 2012 http://www.aeaweb.org/issue.php?journal=POL&volume=4&issue=3 Journal Article The Doctor Might See You Now: The Supply Side Effects of Public Health Insurance Expansions Craig L.GarthwaiteNorthwestern U 190 215 In the United States, public health insurance programs cover over 90 million individuals. Expansions of these programs, such as the recently passed Patient Protection and Affordable Care Act (PPACA), may have large effects on physician behavior. This study finds that following the implementation of the State Children's Health Insurance Program (SCHIP), physicians decreased the number of hours spent with patients, but increased their program participation. Suggestive evidence shows that this decrease resulted from shorter office visits. These findings are consistent with the predictions from a mixed-economy model of physician behavior and provide evidence of crowd out resulting from the creation of SCHIP. (JEL H75, I11, I13, I18) http://www.aeaweb.org/articles.php?doi=10.1257/pol.4.3.190 10.1257/pol.4.3.190 http://www.aeaweb.org/aej/pol/data/2010-0242_data.zip American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 4 3 August 2012 http://www.aeaweb.org/issue.php?journal=POL&volume=4&issue=3 Journal Article Check in the Mail or More in the Paycheck: Does the Effectiveness of Fiscal Stimulus Depend on How It Is Delivered? Claudia R.SahmFederal Reserve Board Matthew D.ShapiroU MI JoelSlemrodU MI 216 50 Recent fiscal policies, including the 2008 stimulus payments and the 2009 Making Work Pay Tax Credit, aimed to increase household spending. This paper quantifies the spending response to these policies and examines differences in spending by whether the stimulus was delivered as a one-time payment or as a flow of payments from reduced withholding. Based on responses from a representative sample of households in the Thomson Reuters/University of Michigan Surveys of Consumers, the paper finds that the reduction in withholding in 2009 boosted spending at roughly half the rate (13 percent) as the one-time payments (25 percent) in 2008. (JEL D12, E21, E62) http://www.aeaweb.org/articles.php?doi=10.1257/pol.4.3.216 10.1257/pol.4.3.216 http://www.aeaweb.org/aej/pol/data/2010-0200_data.zip American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 4 3 August 2012 http://www.aeaweb.org/issue.php?journal=POL&volume=4&issue=3 Journal Article Fiscal Spending Jobs Multipliers: Evidence from the 2009 American Recovery and Reinvestment Act Daniel J.WilsonFederal Reserve Bank of San Francisco 251 82 This paper estimates the "jobs multiplier" of fiscal stimulus spending using the state-level allocations of federal stimulus funds from the American Recovery and Reinvestment Act (ARRA) of 2009. Because the level and timing of stimulus funds that a state receives was potentially endogenous, I exploit the fact that most of these funds were allocated according to exogenous formulary allocation factors such as the number of federal highway miles in a state or its youth share of population. Cross-state IV results indicate that ARRA spending in its first year yielded about eight jobs per million dollars spent, or $125,000 per job. (JEL E24, E62, H72, H75, R23) http://www.aeaweb.org/articles.php?doi=10.1257/pol.4.3.251 10.1257/pol.4.3.251 http://www.aeaweb.org/aej/pol/data/2011-0102_data.zip American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 4 3 August 2012 http://www.aeaweb.org/issue.php?journal=POL&volume=4&issue=3 Journal Article Corrigendum: Quantitative Effects of Fiscal Foresight Eric M.LeeperIN U and Monash U Alexander W.RichterIN U Todd B.WalkerIN U 283 283 http://www.aeaweb.org/articles.php?doi=10.1257/pol.4.3.283 10.1257/pol.4.3.283