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Political Parties Do Matter in U.S. Cities ... For Their Unfunded Pensions

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  • Christian Dippel

Abstract

This paper studies the biggest fiscal challenge currently facing many U.S. cities, namely public-sector pension obligations. Employing a regression discontinuity design (RDD), it tests whether the mayor’s party impacts a city’s public-sector pensions. Pension benefits are shown to grow faster under Democratic-party mayors, while contribution payments simultaneously fall behind. Previous research showed that parties do not matter in U.S. cities for a wide range of fiscal expenditure types, purportedly because voters impose fiscal discipline. This paper shows that parties can matter when expenditures benefit a narrow interest group and are difficult to observe for tax payers.

Suggested Citation

  • Christian Dippel, 2019. "Political Parties Do Matter in U.S. Cities ... For Their Unfunded Pensions," NBER Working Papers 25601, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:25601
    Note: AG LE PE POL
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    Cited by:

    1. Benoît SCHMUTZ & Grégory VERDUGO, 2020. "Do Politicians Shape the Electorate ? Evidence from French Municipalities," Working Papers 2020-18, Center for Research in Economics and Statistics, revised 01 Apr 2021.
    2. Makarin, Alexey & Piqué, Ricardo & Aragón, Fernando, 2020. "National or sub-national parties: Does party geographic scope matter?," Journal of Development Economics, Elsevier, vol. 146(C).
    3. Schmutz, Benoît & Verdugo, Gregory, 2023. "Do elections affect immigration? Evidence from French municipalities," Journal of Public Economics, Elsevier, vol. 218(C).
    4. Carlino, Gerald & Drautzburg, Thorsten & Inman, Robert & Zarra, Nicholas, 2020. "Partisanship and Fiscal Policy in Federal Unions: Evidence from US States," VfS Annual Conference 2020 (Virtual Conference): Gender Economics 224550, Verein für Socialpolitik / German Economic Association.

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    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining

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