Political Parties Do Matter in US Cities... for Their Unfunded Pensions

Christian Dippel

American Economic Journal: Economic Policy, 2022, vol. 14, issue 3, 33-54

Abstract: This paper studies public sector pension obligations, the biggest fiscal challenge currently facing many US cities. Employing a regression discontinuity design around close elections, benefit payments out of a city's public sector pensions are shown to grow faster under Democratic party mayors, while contributions into the pensions do not. Previous research showed that parties do not matter for a wide range of cities' fiscal expenditures and explained this with voters imposing fiscal discipline. This paper replicates previous results but shows that parties can matter for shrouded expenditure types that voters do not pay attention to, especially if they benefit well-organized interest groups.

JEL-codes: D72 H72 H75 J32 J45 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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DOI: 10.1257/pol.20190480

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