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Voters’ responsiveness to public employment policies

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Abstract

This paper examines the electoral rewards for the distribution of public employment. We focus on the Spanish Plan for Rural Employment, a public jobs program introduced by the central government in two lagging regions. We evaluate voters’ responsiveness to this policy using municipal-level electoral data and employ an estimator that combines difference-in-differences with propensity score matching. The main findings are that the program lead to an increase in the vote share for the ruling party in the treated municipalities. This effect is very persistent over the years, and it is unlikely to be explained by turnout buying.

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Notes

  1. An undesired side effect of public employment in Italy is that it has generated some nepotism. Scoppa (2009) provides evidence of this fact as he finds that in Italy, children of public sector employees are more likely to have public jobs than children whose parents are not public employees. The author presents additional results that support the idea that such occupational persistence is explained by nepotism rather than by other factors, such as intergenerationally transmitted preferences.

  2. In contrast to these studies, Mattos and França (2011) find that public employment fosters income concentration in Brazilian municipalities.

  3. Outside Latin America, Labonne (2013) finds evidence that in the Philippines municipalities that benefited significantly from a conditional cash transfers program were more prone to support the incumbent government.

  4. According to the National Statistics Institute (INE), in 2011 Andalusia and Extremadura’s GDP per capita were 25 and 30 %, respectively, below the national average (and the two lowest in Spain); the unemployment rates for the same year were 40 and 15 %, respectively, above the national average.

  5. Statement extracted from the report Dictamen aprobado por la Comisión de Agricultura, Ganadería y Pesca en relación con el informe elaborado por la ponencia especial para estudiar la reforma del actual sistema del Plan de Empleo Rural (PER) y el subsidio agrario. (154/000005), p. 21. Despite suggesting the need for reforms, the program has not undergone substantive changes since it was established.

  6. The list of newspaper articles reporting this fact is extensive. This is just one of the many examples: “The PSOE sweeps to victory in the PER villages.” ABC, 29/11/1993 http://hemeroteca.abc.es/nav/Navigate.exe/hemeroteca/madrid/abc/1993/11/29/052.html.

  7. See, for instance, Cazorla (1995), Hopkin (2001), and Hopkin and Mastropaolo (2001).

  8. In the Spanish context, the term caciquismo is commonly used to refer to clientelism.

  9. For an extensive review of the literature on distributive politics, see Golden and Min (2013).

  10. The extent to which public employees can influence government spending is determined by their market power (Courant et al. 1979). Moreover, if public spending is the outcome of a bargaining process between politicians and bureaucrats (Breton and Wintrobe 1975), the politician’s political prowess may also help to limit the government’s budget (Dahlberg and Mörk 2006).

  11. This behavior translates into a public sector whose budget is larger than is socially optimal. Chang and Turnbull (2002) find empirical support for this hypothesis using data on Taiwan.

  12. Public employees are found to be not only more prone to electoral participation but also more sensitive to public reform proposals than private sector workers (Rattsø and Sørensen 2004).

  13. See Chubb (1981, 1982) for a comprehensive study of Italian patronage.

  14. It was regulated initially by the Royal Decree 3237/1983 of 28 December and the Royal Decree 513/84 of 11 January 1984. The few amendments introduced afterwards are not relevant for this study.

  15. In 1984, 1985, and 1986, this figure increased to 46, 44, and 48 %, respectively, while it remained below 17 % in the other Spanish regions.

  16. As shown by Jofre-Monseny (2014), the agrarian subsidy has contributed to a reduction in the flows of people leaving rural municipalities in Andalusia and Extremadura.

  17. In the 1960s, a mass exodus of agrarian workers to industrial areas took place. This migration reduced the size of the agricultural labor force and raised salaries. Big landowners were concerned about that eventuality and requested state intervention.

  18. The UCD was a center-right party that played a major role during the Spanish transition to democracy. The UCD was the first party in government after the Francoist dictatorship, and the party held power between 1977 and 1982, after which it was replaced by the Socialist Party.

  19. In total, Spain has approximately 8000 municipalities.

  20. Spain has 50 provinces in total; Andalusia and Extremadura have eight and two, respectively.

  21. The central government provides municipalities with most of the money they need to provide the jobs. In addition, the regional government dispenses a smaller fraction of the funds required that covers the cost of materials and equipment. Whenever all of these amounts are not sufficient, the local government defrays a portion of the cost.

  22. An increase in PER hours happens when weather conditions are particularly bad, production falls, and so do the number of hours worked in the agricultural sector. In this context, agricultural workers need to be employed more hours on PER projects to have access to unemployment benefits.

  23. Unfortunately, a systematic collection of data on the geographic distribution of PER recipients at the municipal level did not take place during the early years of the program. For the present study, provincial and regional governments have provided the following information: data on funds and workers in the province of Granada (Andalusia) for 1998–2007, data on funds and workers in the province of Badajoz (Extremadura) for 2008, and data on the distribution of funds in Andalusia for 2008–2010. In Granada and Badajoz, for the years when data are available, 99 % of the municipalities had PER workers.

  24. See, for instance, the following media reports:

    “Andalusian economists ask to eliminate the PER because it fosters fraud and ‘clientelism'”. El Mundo, 22/08/2012 http://www.elmundo.es/elmundo/2012/08/22/andalucia/1345664993.html.

    “PER recipients constitute a group who is mainly thankful to the government. The subsidized countryside votes for those who rule. This is the modern form of clientelism.” ABC 29/11/1993 http://hemeroteca.abc.es/nav/Navigate.exe/hemeroteca/madrid/abc/1993/11/29/047.html.

  25. Poor citizens often are regarded as more susceptible to clientelism provided that the utility they obtain from the private rewards exceeds the disutility of voting contrary to their ideological preferences (Stokes 2005).

  26. In this particular case, a fraud investigation started in 1990, and the mayor of Pinos Puente was sentenced to 18 months’ imprisonment for having approved 200000 working hours for 4000 laborers. http://elpais.com/diario/1996/06/08/espana/834184817_850215.html.

  27. In 1994, the PP proposed an amendment to the PER advocating for increased involvement by the private sector and better support for unemployed individuals through occupational training. During a debate in the Spanish Congress, a PP representative stated that “our party has never questioned social care services, but we do question the current system which does not contribute at all to the creation of wealth. The PER has nothing to do with employment or ruralness.” ABC newspaper 23/02/1994. http://hemeroteca.abc.es/nav/Navigate.exe/hemeroteca/madrid/abc/1994/02/23/073.html.

  28. Alternative definitions of rural areas are those given by Eurostat and the Organization for Economic Cooperation and Development (OECD) that consider rural municipalities are those with fewer than 100 persons/km2 or 150 persons/km2, respectively. We believe, however, that the most appropriate definition is the one given by the Ministry of Agriculture in the Ley de Desarrollo Sostenible del Medio Rural (Law for the Sustainable Development of Rural Areas, Law 45/2007).

  29. For instance, the use of the average unemployment rate to distinguish between municipalities with high and low unemployment is not suitable given that the rate varies greatly over the years.

  30. From 1982 until 1995 (the period under study), the regional governments of the control regions, with the exception of Castile-Leon from 1987, were governed by the Socialist Party.

  31. As we show in the next section, a comparison of the means of the observable variables in the treatment and control municipalities reveals significant differences in terms of population size, unemployment, education, population density, and population growth (variables that may influence our outcomes of interest).

  32. Abadie (2005) proposes a semiparametric difference-in-differences estimator similar to that of Heckman et al. (1997, 1998) but with a different weighting scheme.

  33. Recall that \(\hat{\tau }_{M}={\displaystyle \sum\nolimits _{i\epsilon \left\{ PER=1\right\} }}\left[ Y_{i}-\sum\nolimits _{j\epsilon \left\{ PER=0\right\} }W_{ij}Y_{j}\right] w_{i}\) is the matching estimator of the average effect of the treatment on the treated municipalities. In other words, the DiD estimates are weighted by the likelihood of being treated.

  34. The data are publicly available at http://www.infoelectoral.mir.es/.

  35. Recent studies (see, e.g., Austin 2011) suggest computing propensity scores using covariates which may be related to the outcome but not to the treatment. In our study, taking into account the percentage of retired people in the propensity score does not affect the findings. These results are available upon request.

  36. The units of temporary wage labor are obtained from the Agrarian Census published by the National Institute of Statistics.

  37. According to some studies, the maximum standardized difference that should be accepted ranges from 10 to 25 % (Austin 2009; Stuart et al. 2013).

  38. An F-test rejects the hypothesis that the regional trends are jointly equal to zero.

  39. A clear example is the Spanish general election of 2004 when there was a substantial increase in voter turnout of seven percentage points, which gave the PSOE its victory. The main opposition party, the People’s Party, had a major loss of votes in percentage terms but not in absolute number of votes, which means that the mobilization of voters did not favor the PP (see Boso et al. 2005). Furthermore, in a quantitative analysis of the Spanish case, Rowe et al. (2014) find that a one-point increase in voter turnout raises the vote share of the Socialist Party by 0.5 points in the short run and by 0.9 points in the long run.

  40. Arulampalam et al. (2009) and Solé-Ollé and Sorribas-Navarro (2008) provide empirical evidence for such partisan bias for India and Spain, respectively.

  41. The data are obtained from the establishments census.

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Acknowledgments

This paper benefited from the financial support of ECO2009-12680/ECON (the Spanish Ministry of Education and Science) and project 2009 SGR 102 (Generalitat de Catalunya). I thank Christina Gathmann, Albert Solé-Ollé, Pilar Sorribas-Navarro, two anonymous referees, and the editor of this journal for very useful suggestions and help. I am also grateful to Jordi Jofre-Monseny, the regional government of Andalusia, the provincial government of Granada, and the provincial delegation of the SEPE in Badajoz, for providing relevant data for this study. Seminar participants at CESifo, the University of Heidelberg, the 71st Annual Conference of the MPSA, and the 2014 Meeting of the EPCS also provided valuable feedback.

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  1. Heidelberg University and Barcelona Institute of Economics (IEB), Bergheimer Str. 58, 69115, Heidelberg, Germany

    Marta Curto-Grau

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Curto-Grau, M. Voters’ responsiveness to public employment policies. Public Choice 170, 143–169 (2017). https://doi.org/10.1007/s11127-016-0388-6

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