PUBLICATIONS
Evaluating State and Local Business Tax Incentives (with Owen Zidar) Journal of Economic Perspectives 34(2) Spring 2020. Slides. Featured in: Wall Street Journal, Forbes, Governing.
Corporate Political Spending and State Tax Policy: Evidence from Citizens United (with Alisa Tazhitdinova and Sarah Robinson) Journal of Public Economics 221 May 2023. Publisher’s Link. Featured in: Wall Street Journal, Harvard Law School Forum.
Bidding for Firms: Subsidy Competition in the U.S. Forthcoming at the Journal of Political Economy Awards: National Tax Association Outstanding Doctoral Dissertation in Government Finance and Taxation, International Industrial Organization Conference Best Rising Star Paper, University of Virginia Outstanding Dissertation.
WORKING PAPERS
The Political Economy of Subsidy-Giving Abstract: Politicians regularly offer large discretionary subsidies to attract firms to their jurisdictions. In this paper I quantify the political benefit of this subsidy-giving by combining hand-collected subsidy data, county level election returns, and an original survey of voters. Subsidy-giving generates a 2ppt increase in vote share for incumbent governors in the winning county. I use the survey estimates to inform bounds on a state-level effect, and I find that observed subsidy-giving is pivotal for 12% of the elections in the sample. I show that this effect is not due to realized job creation. Instead, the salience of firm attraction drives electoral rewards.
Consolidation and Political Influence in the Auto Retail Industry (with Sarah Moshary) Abstract: This paper provides novel empirical evidence on the causal link between consolidation and political influence. Focusing on the auto retail industry, we show that mergers lead to higher levels of industry lobbying, on the order of +70%. This increase is driven by mergers that resolve the collective action problem, leading firms to internalize a greater share of lobbying benefits. Further, this lobbying translates into more favorable legislation for the industry; we estimate a 7ppt increase in enactment probability for bills that car dealers support. Our findings underscore the distinction between concentration and size in economic models of lobbying.
Legislation, Regulation and Litigation: Demand for U.S. Legal Services in Historical Perspective (with Ariell Reshef) Abstract: In the twenty years between 1970 and 1990 the employment share of legal services more than doubled, reaching 1.15% of the private sector---in stark contrast to stability during 1850--1970 and in 1990--2015. During the same period the relative wage of legal services almost doubled, driven by commensurate increases in lawyers' wages and of law firm partners' income. We argue that that this demand shift was driven by important legislation and deregulation events, starting in the mid-1960s and lasting throughout the 1980s. Using historical data, we observe a tight correlation between the employment and compensation of lawyers and the scope of, and uncertainty created by, federal regulations and legislation. This is supported by cross-state and micro-level analysis. Other factors, e.g., shifts in lawyers' quality, patenting, firm density and ICT are not important determinants of the demand shift. A back of the envelope calculation implies that 42% of income to lawyers and partners are in excess of what these payments would be if relative income remained at 1970 levels. This represents an excess cost of $104 billion dollars in 2015 alone.
Works in Progress
Procurement and Infrastructure Costs (with Zachary Liscow and William Nober) [NEW DRAFT COMING SOON] Abstract: Why is it so expensive to build and maintain U.S. infrastructure? In this paper we conduct a survey of infrastructure procurement practices across the 50 states. We survey both employees at each state department of transportation (DOT) and the road builders that win contracts to build and maintain roads. With this survey we can create a new dataset of procurement rules and practices across the U.S. and start to understand what actors on the ground think drives costs. We correlate the survey practices with a new, detailed data set of project-level infrastructure costs. We find that two important inputs in the procurement process appear to particularly drive costs: (1) the capacity of the DOT procuring the project and (2) the lack of competition in the market for government construction contracts. Survey with responses.
The Distributional Effects of Million Dollar Plants (with Ben Hyman, Moises Yi, and Owen Zidar)
Tax Discrimination: Competition in the Market for Firms (with Mathilde Muñoz)