US State Data Research Articles

Public education expenditures, growth and income inequality

This paper analyzes the relationship between public education spending, long-run growth and income inequality. We propose an endogenous growth model with occupational choice and an endogenous supply of teachers and education quality. We show that endogenous school quality alters the shape of those relationships in a way that has new policy implications. First, growth depends on the level of public education expenditures and on the shape of the human capital distribution. Second, the relationship between public education and inequality can be either positive or negative. Calibrating our model to US state data, we find that a significant share of states faces a trade-off between increasing growth and decreasing inequality through public education spending. We find that this trade-off is overall more likely in states with higher public education expenditures, teacher employment share and relative wage, and intergenerational mobility. Finally, the existence of such a trade-off depends on how public education spending is financed.

State Export Promotion and Firm-level Employment

Most US states have export promotion programs, but it is unknown if these programs create long-term employment, which is often the policy’s stated goal. We merge administrative export promotion and employment data from Washington State to test the effect of firm-level export promotion on firm-level employment using the differences-in-differences estimator. We believe we are the first to have US state data at this level of detail. We find firm participation in an export assistance program increases firm-level employment fleetingly, but not in subsequent periods. Thus, we do not find a statistically significant impact to long-term employment from program participation.

A Tale of Two Tails: Establishment Size and Labour Productivity in United States and German Manufacturing at the Start of the Twentieth Century

This paper studies the importance of establishment size for the German/US labour‐productivity gap in manufacturing at the start of the twentieth century. First, we show that the left tail of the employment distribution by establishment size was larger in Germany than in the USA. Second, using US state data for 1909, we find a positive correlation between establishment size and labour productivity. Third, imposing the coefficients of these estimates on establishment‐size differences between Germany and the USA, we calculate that a redistribution of German employment to larger establishments, as in the USA, reduces the labour‐productivity gap by about 25 per cent.

MicromapST: Exploring and Communicating Geospatial Patterns in US State Data

The linked micromap graphical design uses color to link each geographic unit’s name with its statistical graphic elements and map location across columns in a single row. Perceptual grouping of these rows into smaller chunks of data facilitates local focus and visual queries. Sorting the geographic units (the rows) in different ways can reveal patterns in the statistics, in the maps, and in the association between them. This design supports both exploration and communication in a multivariate geospatial context. This paper describes micromapST, an R package that implements the linked micromap graphical design specifically formatted for US state data, a common geographic unit used to display geographic patterns of health and other factors within the US. This package creates a graphic for the 51 geographic units (50 states plus DC) that fits on a single page, with states comprising the rows and state names, graphs and maps the columns. The graphical element for each state/column combination may represent a single statistical value, e.g., by a dot or horizontal bar, with or without an uncertainty measure. The distribution of values within each state, e.g., for counties, may be displayed by a boxplot. Two values per state may be represented by an arrow indicating the change in values, e.g., between two time points, or a scatter plot of the paired data. Categorical counts may be displayed as horizontal stacked bars, with optional standardization to percents or centering of the bars. Layout options include specification of the sort order for the rows, the graph/map linking colors, a vertical reference line and others. Output may be directed to the screen but is best displayed on a printer (or as a print image saved to any file format supported by R). The availability of a pre-defined linked micromap layout specifically for the 51 US states with graphical displays of single values, data distributions, change between two values, scatter plots of paired values, time series data and categorical data, facilitates quick exploration and communication of US state data for most common data types.

Lame Ducks and Divided Government: How Voters Control the Unaccountable

Divided government is not only the outcome of moderate voters’ electoral decision to balance party ideology in government, but a more general reaction of voters to a systematic control problem. Voters realize that term limited executives (i.e., “lame ducks”) cannot be held accountable due to the missing re-election incentives. By dividing government control voters force a lame duck to compromise on policies with an opposing legislature and restrict his ability to extract rents. Based on US state data I present empirical evidence showing that the probability of divided government is 9 to 15 percent higher when governors are lame ducks.

Impacts of local and state tax and expenditure limits on economic growth

We focus on the impact of statutory and constitutional Tax and Expenditure Limits (TELs) on growth levels and rates of convergence. Using a panel of US state data from 1987 to 2004, we report a family of neoclassical growth models. Using simple dummy variables to identify states with and without strict TELs, we find that local property tax levy limits do not significantly influence income growth and convergence rates. Results for state revenue and expenditure limits suggest that more recent limits may have negatively affected income growth and slowed convergence.

New Keynesian or RBC transmission? The Effects of Fiscal Policy in Labor Markets

We study the mechanics of transmission of fiscal shocks to labor markets. We characterize a set of robust implications following government consumption, investment and employment shocks in a RBC and a New-Keynesian model and use part of them to identify shocks in the data. In line with the New-Keynesian story, shocks to government consumption and investment increase real wages and employment contemporaneously both in US aggregate and in US state data. The dynamics in response to employment shocks are mixed, but in many cases are inconsistent with the predictions of the RBC model.

Regional cyclical asymmetries in an optimal currency area: an analysis using US state data

Two key assumptions are often used in assessing the feasibility of a common currency area (CCA). First, asymmetric shocks increase the costs of forming a CCA. Second, the US represents a useful benchmark for evaluating a potential CCA. Changes in the asymmetry of US regional cycles, however, are rarely examined. Therefore, this study examines the synchronization of US regional business cycles for 1971–98. The results reveal that US state cyclical asymmetries changed over time, with synchronization appearing to decline by the latter 1980s. This suggests that the US was less likely to fit CCA criteria in the 1990s, which conflicts with its apparent successful monetary-policy experience. Yet, this seeming contradiction can be explained by a tradeoff between the volatility of the common-national business cycle and regional synchronization. Given that the volatility of an area's common shock can change regularly, these findings have implications for the assessment of all CCAs.

Religious participation and income

The relationship between religion and income has been explored in several studies. In this paper, we extend this inquiry by arguing that religious participation, through its effects on preferences and net earnings potential, reduces participants’ incomes. Similarly, we argue that high incomes discourage religious participation by encouraging individuals to substitute market work for religious activities. In an empirical model, we simultaneously estimate the effects of religious participation on income and income on religious participation, using US state data on per capita personal income and church membership. The results strongly support our hypotheses.

The inflation/growth relationship: evidence from state panel data

Employing US state data, a positive correlation is found between inflation and growth during the 1980s, accompanied by a downward trend in inflation. During the 1960s and 1970s, a negative correlation was accompanied by an upward trend in inflation.