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Report
Online Appendix for: How Do Voters Respond to Welfare vis-à-vis Public Good Programs? An Empirical Test for Clientelism
This appendix accompanies Staff Report 605: How Do Voters Respond to Welfare vis-à-vis Public Good Programs? An Empirical Test for Clientelism.
Journal Article
The Visible Hand: The Role of Government in China’s Long-Awaited Industrial Revolution
China is undergoing its long-awaited industrial revolution. There is no shortage of commentary and opinion on this dramatic period, but few have attempted to provide a coherent, in-depth, politicaleconomic framework that explains the fundamental mechanisms behind China?s rapid industrialization. This article reviews the New Stage Theory of economic development put forth by Wen (2016a). It illuminates the critical sequence of developmental stages since the reforms enacted by Deng Xiaoping in 1978: namely, small-scale commercialized agricultural production, proto-industrialization in the ...
Working Paper
Have Distressed Neighborhoods Recovered? Evidence from the Neighborhood Stabilization Program
During the 2007-2009 housing crisis, concentrations of foreclosed and vacant properties created severe blight in many cities and neighborhoods. The federal Neighborhood Stabilization Program (NSP) was established to help mitigate distress in hard-hit areas by funding the rehabilitation or demolition of troubled properties. This paper analyzes housing market changes in areas that received investments during the second round of NSP funding, focusing on seven large urban counties. Grantees used NSP to invest in census tracts with high rates of distressed and vacancy properties, and tracts that ...
Journal Article
The Great Recession’s impact on school district finances in New York State
A slowly emerging literature explores the effects of the Great Recession on different parts of the economy; however, very little research examines the impact of the Great Recession (or any other recession) on schools. Given the fundamental role of education in human capital formation and growth, understanding the effect of recessions on schools is essential. This article contributes to filling this gap. Exploiting detailed panel data on a multitude of school finance indicators and a trend shift analysis, it examines how the Great Recession affected school finances in New York State. While it ...
Working Paper
Flood Risk Mapping and the Distributional Impacts of Climate Information
This paper examines the provision of official flood risk information in the United States and its distributional impacts on residential flood insurance take-up. Assembling new data on all flood maps produced after Hurricane Katrina, I first document that updated maps decreased the number of properties zoned in high-risk floodplains and incorrectly omitted five million properties that should have been rezoned inside these areas. Removals and omissions disproportionately occurred in neighborhoods with more Black and Hispanic residents. Leveraging the staggered timing of map updates, I estimate ...
Report
How Do Voters Respond to Welfare vis-à-vis Public Good Programs? An Empirical Test for Clientelism
This paper examines allocation of benefits under local government programs in West Bengal, India to isolate patterns consistent with political clientelism. Using household survey data, we find that voters respond positively to private welfare benefits but not to local public good programs, while reporting having benefited from both. Consistent with the voting patterns, shocks to electoral competition induced by exogenous redistricting of villages resulted in upper-tier governments manipulating allocations across local governments only for welfare programs. Through the lens of a hierarchical ...
Report
The impact of the Great Recession on school district finances: evidence from New York
Despite education?s fundamental role in human capital formation and growth, there is no research that examines the effect of the Great Recession (or any other recession) on schools. Our paper begins to fill this gap. Exploiting detailed data on school finance indicators and an analysis of trend shifts, we examine how the Great Recession affected school funding in New York State. While we find no evidence of effects on either total revenue or expenditure, there were important compositional changes to both. There is strong evidence of substitution of funds on the revenue side?the infusion of ...
Working Paper
Fewer Vacants, Fewer Crimes? Impacts of Neighborhood Revitalization Policies on Crime
The relationship between neighborhood physical environment and social disorder, particularly crime, is of critical interest to urban economists and sociologists, as well as local governments. Over the past 50 years, various policy interventions to improve physical conditions in distressed neighborhoods have also been heralded for their potential to reduce crime. Urban renewal programs in the mid-20th century and public housing redevelopment in the 1990s both subscribed to the idea that signs of physical disorder invite social disorder. More recently, the federal Neighborhood Stabilization ...
Report
Optimal Tax Progressivity: An Analytical Framework
What shapes the optimal degree of progressivity of the tax and transfer system? On the one hand, a progressive tax system can counteract inequality in initial conditions and substitute for imperfect private insurance against idiosyncratic earnings risk. At the same time, progressivity reduces incentives to work and to invest in skills, and aggravates the externality associated with valued public expenditures. We develop a tractable equilibrium model that features all of these trade-offs. The analytical expressions we derive for social welfare deliver a transparent understanding of how ...
Report
Optimal Progressivity with Age-Dependent Taxation
This paper studies optimal taxation of labor earnings when the degree of tax progressivity is allowed to vary with age. We analyze this question in a tractable equilibrium overlapping-generations model that incorporates a number of salient trade-offs in tax design. Tax progressivity provides insurance against ex-ante heterogeneity and earnings uncertainty that missing markets fail to deliver. However, taxes distort labor supply and human capital investments. Uninsurable risk cumulates over the life cycle, and thus the welfare gains from income compression via progressive taxation increase ...