This setting lets you change the way you view articles. You can choose to have articles open in a dialog window, a new tab, or directly in the same window.
Open in Dialog
Open in New Tab
Open in same window

American Economic Review: Vol. 99 No. 5 (December 2009)

Expand

Quick Tools:

Print Article Summary
Export Citation
Sign up for Email Alerts Follow us on Twitter

Explore:

AER - All Issues

AER Forthcoming Articles

Direct Democracy and Public Employees

Article Citation

Matsusaka, John G. 2009. "Direct Democracy and Public Employees." American Economic Review, 99(5): 2227-46.

DOI: 10.1257/aer.99.5.2227

Abstract

In the public sector, employment may be inefficiently high because of patronage, and wages may be inefficiently high because of public employee interest groups. This paper explores whether the initiative process, a direct democracy institution of growing importance, ameliorates these political economy problems. In a sample of 650+ cities, I find that when public employees cannot bargain collectively and patronage could be a problem, initiatives appear to cut employment but not wages. When public employees bargain collectively, driving up wages, the initiative appears to cut wages but not employment. The employment-cutting result is robust; the wage-cutting result survives some but not all robustness tests. (JEL D72, J31, J45, J52)

Article Full-Text Access

Full-text Article

Additional Materials

Download Data Set (1.46 MB)

Authors

Matsusaka, John G. (U Southern CA, Los Angeles)

JEL Classifications

D72: Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior
J31: Wage Level and Structure; Wage Differentials
J45: Public Sector Labor Markets
J52: Dispute Resolution: Strikes, Arbitration, and Mediation; Collective Bargaining


American Economic Review


Quick Tools:

Sign up for Email Alerts

Follow us on Twitter

Subscription Information
(Institutional Administrator Access)

Explore:

AER - All Issues

AER - Forthcoming Articles

Virtual Field Journals


AEA Member Login:


AEAweb | AEA Journals | Contact Us