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22 December 2014

Local Media and Electoral Sanctioning of Mexican Politicians

We estimate the effect of local media outlets on political accountability in Mexico, focusing on malfeasance by municipal mayors. We study federal grants earmarked for infrastructure projects targeting the poor, and leverage two sources of plausibly exogenous variation. First, we exploit variation in the timing of the release of municipal audit reports. Second, and moving beyond existing studies, we exploit variation in media exposure at the electoral precinct level. In particular, we compare neighboring precincts on the boundaries of media stations’ coverage areas to isolate the effects of an additional media station. We find that voters punish the party of malfeasant mayors, but only in electoral precincts covered by local media stations (which emit from within the precinct’s municipality). An additional local radio or television station reduces the vote share of an incumbent political party revealed to be corrupt by 1 percentage point, and reduces the vote share of an incumbent political party revealed to have diverted funds to projects not benefiting the poor by around 2 percentage points. We also show that these electoral sanctions persist: at the next election, the vote share of the current incumbent’s party continues to be reduced by a similar magnitude. The electoral costs of diverting resources away from the poor are especially large for the populist Institutional Revolutionary Party (PRI) party. However, we find no effect of media stations based in other municipalities.

19 December 2014

Unemployment in the Great Recession: A Comparison of Germany, Canada and the United States

Unemployment rates did not change substantially in Germany, increased and remained relatively high in the United States, and increased moderately in Canada during and after the Great Recession of 2008-09. Florian Hoffmann and Thomas Lemieux offer two explanations for the weaker performance of the U.S. labor market: large employment swings in U.S. housing construction and a much greater drop in U.S. GDP compared with Germany.

18 December 2014

Are Public Sector Jobs Recession-Proof? Were They Ever?

In both recessionary and non-recessionary periods, the probability of job loss is higher for private sector workers than for public employees, Jason L. Kopelman and Harvey S. Rosen find. The probability of displacement for private sector workers increased during both the Great Recession and earlier recessions studied, while in the public sector job loss rates sometimes increased and sometimes decreased, and varied among federal, state, and local governments.
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