Negative advertising is frequent in electoral campaigns, despite its ambiguous effectiveness: Negativity may reduce voters’ evaluation of the targeted politician but may have a backlash effect for the attacker. We study the effect of negative advertising in electoral races with more than two candidates with a large-scale field experiment during an electoral campaign for mayor in Italy and a survey experiment in a fictitious mayoral campaign. In our field experiment, we find a strong, positive spillover effect on the third main candidate (neither the target nor the attacker). This effect is confirmed in our survey experiment, which creates a controlled environment with no ideological components or strategic voting. The negative ad has no impact on the targeted incumbent, has a sizable backlash effect on the attacker, and largely benefits the idle candidate. The attacker is perceived as less cooperative, less likely to lead a successful government, and more ideologically extreme.
Public health response to COVID-19 requires behavior changes— isolation at home, wearing masks. Its effectiveness depends on generalized compliance. Original data from two waves of a survey conducted in March−April 2020 in eight Organisation for Economic Co-operation and Development countries (n =21,649) show large gender differences in COVID-19−related beliefs and behaviors. Women are more likely to perceive the pandemic as a very serious health problem and to agree and comply with restraining measures. These differences are only partially mitigated for individuals cohabiting or directly exposed to COVID-19. This behavioral factor contributes to substantial gender differences in mortality and is consistent with women-led countries responding more effectively to the pandemic. It calls for gender-based public health policies and communication.
Coronavirus has been portrayed as the ‘great equalizer’. None seems immune to the virus and to the economic consequences of the lockdown measures imposed to contain its diffusion. We exploit novel data from two real-time surveys to study the early impact on the labor market of the lockdown in Italy—one of the two countries, with China, hit hard and early. We find that low-educated workers, blue collars, and low-income service workers were more likely to have stopped working both 3-week and 6-week after the lockdown. Low-educated workers were less likely to work from home. Blue collars worked more from their regular workplace, but not from home. Low-income service workers were instead less likely to work from the regular workplace. For both blue collars and low-income service workers, the monthly labor income dropped already in March. Some positive adjustments took place between the 3rd and the 6th week from the lockdown: the share of idle workers dropped, as the proportion of individuals working at home and from their regular workplace increased. However, these adjustments benefited mostly highly educated workers and white collars. Overall, low-income individuals faced worse labor market outcomes and suffered higher psychological costs.
“The Politics of Aging and Retirement: Evidence from Swiss Referenda” 2020, Population Studies, (with P. Bello)
Ageing threatens the financial sustainability of pay-as-you-go pension systems, since it increases the share of retirees to workers. An often-advocated policy response is to increase retirement age. Ironically, however, the political support for this policy may actually be hindered by population ageing. Using Swiss administrative voting data at municipal level from pension reform referenda (and individual survey data), we show in fact that individuals close to retirement tend to oppose policies that postpone retirement, whereas younger and older individuals are more favourable. The current process of population ageing and the associated increase in the size of the cohort of individuals close to retirement may partially explain why a pension reform that increased retirement age for women was approved in two referenda in 1995 and 1998, while a reform that proposed a similar increase in women’s retirement age was defeated in a 2017 referendum.
“Old Before Their Time: The Role of Employers In Retirement Decisions”, 2020, International Tax and Public Finance (with P. Bello)
Do elderly workers retire early voluntarily, or are they induced to retire by their employers? We consider an exogenous shock due to a trade agreement between Switzerland and the EU—the mutual recognition agreement (MRA), which improved access to the EU market for Swiss firms. A vast literature suggests that these trade liberalization episodes lead firms to relocate and to innovate in order to increase productivity. This may lead to lower demand of skill obsolescent elderly workers and to higher demand of skilled workers. We use a difference in differences approach on Swiss Labor Force Survey data to compare early retirement behavior in treated MRA and control (non-MRA) industries in three periods (pre-liberalization, announcement, and implementation). We find an increase in early retirement in the MRA sector during the announcement period, which is stronger for larger firms, for exporting firms and for firms with a large age wage gap. We also find an increase in the share of graduates in all age groups. Wages are largely unaffected.
“The Economic Effects of Electoral Rules: Evidence from Unemployment Benefits”, 2019, Quarterly Journal of Political Science (with S. Nunnari)
This paper provides a novel test of the link from electoral rules to economic policies. We focus on unemployment benefits because their classification as a broad or targeted transfer may vary — over time and across countries — according to the geographical dispersion of unemployed citizens, the main beneficiaries of the program. A simple theoretical model delivers unambiguous predictions on the interaction between electoral institutions and the unemployment rate in contestable and safe districts. Due to electoral incentives, the difference in the unemployment generosity between majoritarian and proportional systems depends on the difference in the unemployment rate between contestable and safe districts. We test this prediction using a novel dataset with information on electoral competitiveness and unemployment rates at district level, and different measures of unemployment benefit generosity for 16 OECD countries between 1980 and 2011. The empirical analysis strongly supports the theoretical predictions.
“Political Selection under Alternative Electoral Rules” Public Choice, 2017, pp. 257–281 (with T. Nannicini)
We study the patterns of political selection in majoritarian versus proportional systems. Political parties face a trade off in choosing the mix of high- and low-quality candidates: high-quality candidates are valuable to voters, and thus help to win elections, but they crowd out loyal candidates, who are most preferred by the parties. Under proportional representation, politicians’ selection depends on the share of swing voters in the entire electorate. In majoritarian elections, it depends also on the distribution of competitive versus safe (single-member) districts. We show that a majoritarian system with only a few competitive districts is less capable of selecting good politicians than a proportional system. As the share of competitive districts increases, the majoritarian system becomes more efficient than the proportional system. However, for a large enough share of competitive districts, a non-monotonic relation arises: the marginal (positive) effect of adding high-quality politicians on the probability of winning the election is reduced, and highly competitive majoritarian systems become less efficient than proportional ones in selecting good politicians.
“Information and Women’s Intentions: Experimental Evidence About Child Care”, 2017, European Journal of Population, pp. 109–128 (with P. Profeta, C. Pronzato and F. Billari)
We investigate the effect of providing information about the benefits to children of attending formal child care when women intend to use formal child care so they can work. We postulate that the reaction to the information differs across women according to their characteristics, specifically their level of education. We present a randomized experiment in which 700 Italian women of reproductive age with no children are exposed to positive information about formal child care through a text message or a video, while others are not. We find a positive effect on the intention to use formal child care and a negative effect on the intention to work. This average result hides important heterogeneities: the positive effect on formal child care use is driven by high-educated women, while the negative effect on work intention is found only among less-educated women. These findings may be explained by women’s education reflecting their work–family orientation, and their ability to afford formal child care.
“So Closed: Political Selection in Proportional Systems”, European Journal of Political Economy, 2015, pp. 260–273 (with T. Nannicini)
We analyze political selection in a closed list proportional system where parties have strong gate-keeping power, which they use as an instrument to pursue votes. Parties face a trade-off between selecting loyal candidates or experts, who are highly valued by the voters and thus increase the probability of winning the election. Voters can be rational or behavioral. The former cares about the quality mix of the elected candidates in the winning party, and hence about the ordering on the party list. The latter only concentrate on the quality type of the candidates in the top positions of the party list. Our theoretical model shows that, to persuade rational voters, parties optimally allocate loyalists to safe seats and experts to uncertain positions. Persuading behavioral voters instead requires to position the experts visibly on top of the electoral list. Our empirical analysis, which uses data from the 2013 National election in Italy—held under closed list proportional representation—and from independent pre-electoral polls, is overall supportive of voters' rational behavior. Loyalists (i.e., party officers or former members of Parliament who mostly voted along party lines) are overrepresented in safe positions, and, within both safe and uncertain positions, they are ranked higher in the list.
"The role of political partisanship during economic crises", 2014, Public Choice, 158, pp 143-165.
Major economic crises may promote structural reforms, by increasing the cost of the status quo, or hinder them, by inducing more demand for protection. The ideology and political partisanship of the ruling government may be crucial in determining the prevailing course of action. In good times, conservative parties are typically pro-reform. However, do these parties try to exploit periods of crisis to carry out their reforms? Do social-democratic parties support even greater social protection? To answer these questions, this paper uses indicators of structural reforms in the labor, product, and financial markets for 25 OECD countries over the 1975–2008 period. The empirical analysis confirms the ambiguous effect of crises: product markets are liberalized, but financial markets become more regulated. Partisan politics also matters, as right parties are associated with more pro-market reforms. Yet, crises modify partisan politics: right-wing parties refrain from promoting privatizations, and oppose the introduction of greater financial market regulations. By contrast, center parties liberalize and trim unemployment benefits generosity, while left parties privatize. Furthermore, weak, fractionalized governments, which are associated with more regulated product markets, are also more likely to liberalize during a crisis.
“The role of income effects in early retirement”, 2013, Journal of Public Economic Theory, 15, pp 477-505 (with J.I. Conde-Ruiz and P. Profeta)
We provide a long-term perspective on the individual retirement behavior and on the future of retirement by emphasizing the role of (negative) income effects. We consider a political economic theoretical framework, with actuarially “fair” and “unfair” early retirement schemes, and derive a political equilibrium with positive social security contribution rates and early retirement. A reduction in the wages in youth, consistent with the recent labor market trends since the massive introduction of temporary jobs, induces workers to postpone retirement, and—in the “unfair” system—leads to lower contribution rates. A reduction in the growth rate of the economy has opposite effects on the retirement decisions, leading—in the “unfair” system—to more early retirement. Aging induces a negative income effect, but has also an opposite political effect on social security contributions and retirement decisions. For an actuarially “fair” social security system, we provide conditions for the political effect to dominate; in an “unfair” scheme, numerical simulations confirm a slight predominance of the political effect, as contribution rates increase. These results may shed some light on the future of early retirement in aging societies.
“The Political Economy of Flexicurity”, 2012, Journal of the European Economic Association, 10, pp 684-715. (with T. Boeri and J.I. Conde-Ruiz)
We document the presence of a trade-off in the labor market between the protection of jobs and the support offered to unemployed people. Different countries’ locations along this trade-off represent stable political-economic equilibria. We develop a model in which individuals determine the mix of job protection and support for the unemployed in a political environment. Agents are heterogeneous along two dimensions: employment status (insiders and outsiders) and skills (low and high). Unlike previous work on the political economy of labor market institutions, we emphasize the role of job protection and unemployment benefits in the wage-setting process. A key implication of the model is that flexicurity configurations with low levels of job protection and high levels of support to the unemployed should emerge in the presence of a highly educated workforce. Panel regressions of countries’ locations along this institutional trade-off are consistent with the implications of our model.
“Competing on good politicians”, American Political Science Review, 2011, 105, pp 79-99 (with T. Nannicini).
Is electoral competition good for political selection? To address this issue, we introduce a theoretical model where ideological parties select and allocate high-valence (experts) and low-valence (party loyalists) candidates into electoral districts. Voters care about a national policy (e.g., party ideology) and the valence of their district's candidates. High-valence candidates are more costly for the parties to recruit. We show that parties compete by selecting and allocating good politicians to the most contestable districts. Empirical evidence on Italian members of parliament confirms this prediction: politicians with higher ex ante quality, measured by years of schooling, previous market income, and local government experience, are more likely to run in contestable districts. Indeed, despite being different on average, politicians belonging to opposite political coalitions converge to high-quality levels in close electoral races. Furthermore, politicians elected in contestable districts have fewer absences in parliament, due to a selection effect more than to reelection incentives.
“Political Intergenerational Risk Sharing”, Journal of Public Economics, 2010, 94, pp. 628-637 (with M. D'Amato).
In a stochastic two-period OLG model, featuring an aggregate shock to the economy, ex-ante optimality requires intergenerational risk sharing. We compare the level of intergenerational risk sharing chosen by a benevolent government and by an office-seeking politician. In our political system, the transfer of resources across generations is determined as a Markov equilibrium of a probabilistic voting game. Low realized returns on the risky asset induce politicians to compensate the old through a PAYG system. This political system typically generates an intergenerational risk sharing scheme that is (i) larger, (ii) more persistent, and (iii) less responsive to the realization of the shock than the social optimum. This is because the current politician anticipates her transfers to the elderly to be compensated by future politicians through offsetting transfers, and hence overspends.
“Investing for the old age: pensions, children and savings”, International Tax and Public Finance, 2009, (with R. Gatti and P. Profeta)
In the last century, most countries have experienced both an increase in pension spending and a decline in fertility. We argue that the interplay of pension generosity and development of capital markets is crucial to understand fertility decisions. Since children have traditionally represented for parents a form of retirement saving, particularly in economies with limited or nonexistent capital markets, an exogenous increase of pension spending provides a saving technology alternative to children, thus relaxing financial (saving) constraints and reducing fertility. We build a simple two-period OLG model to show that an increase in pensions is associated with a larger decrease in fertility in countries in which individuals have less access to financial markets. Cross-country regression analysis supports our result: an interaction between various measures of pension generosity and a proxy for the development of financial markets consistently enters the regressions positively and significantly, suggesting that in economies with limited financial markets, children represent a (if not the only) way for parents to save for old age, and that increases in pensions amount effectively to relaxing these constraints.
“Postponing retirement: the political effect of aging ”, Journal of Public Economics, 2008, 92, pp. 2157-69.
Conventional economic wisdom suggests that because of the aging process, social security systems will have to be retrenched. In particular, retirement age will have to be largely increased. Yet, is this policy measure feasible in OECD countries? Since the answer belongs mainly to the realm of politics, I evaluate the political feasibility of postponing retirement under aging in France, Italy, the UK, and the US. Simulations for the year 2050 steady state demographic, economic and political scenario suggest that retirement age will be postponed in all countries, while the social security contribution rate will rise in all countries, but Italy. The political support for increasing the retirement age stems mainly from the negative income effect induced by aging, which reduces the profitability of the existing social security system, and thus the individuals' net social security wealth.
“How does ageing affect the welfare state?”, European Journal of Political Economy, March 2007. (with P. Profeta)
Ageing has opposite economic and political effects on the size of the welfare state. On one side, it tends to decrease the profitability of a welfare state that features a PAYG pension system, thus inducing individuals to prefer a smaller system; on the other side, the pivotal (median) voter becomes older (or poorer) and hence more willing to support a larger system. The overall effect is thus ambiguous. We show that specific features of the welfare system, such as its composition and the redistributive design of social security, may change the magnitude of the economic effect and thus of the overall impact of ageing on the size of the welfare state.
“Redistribution and Fairness: A Note”, European Journal of Political Economy, 2003, 19, pp.885-892.
The introduction of (inequity adverse) fair agents in a simple redistributive voting game reduces the political relevance of the middle class and increases the equilibrium level of redistribution. Interestingly, some of the predictions in Meltzer and Richard [J. Polit. Econ. 89 (1981) 914–927] are affected: a rise in the income inequality between poor and middle class may not decrease redistribution, because of the additional support for redistribution provided by the fair agents.
“Early Retirement”, Review of Economic Dynamics, 2003, 6, pp. 12-36, (with J. I. Conde Ruiz)
Generous early retirement provisions account for a large proportion of the drop in the labor force participation of elderly workers. The aim of this paper is to provide a positive theory of early retirement. We suggest that the political support for generous early retirement provisions relies on: (i) the existence of a significant group of elderly workers with incomplete working history, who are not entitled to an old age pension; and (ii) the intragenerational redistribution built in this provision via the utility from leisure that induces low-ability workers to retire early. The majority which supports early retirement in a bidimensional voting game is composed of elderly with incomplete working history and low-ability workers; social security is supported by retirees and low-ability workers.
“Fiscal Constitutions”, Journal of Economic Theory, 103, 2002, pp. 255-281 (with C. Azariadis)
We study the impact of fiscal constitutions on intergenerational transfers in an overlapping generation model with linear technology. Transfers represent outcomes of a voting game among selfish agents. Policies are decided one period at a time. Majoritarian systems, which accord voters maximum fiscal discretion, sustain all individually rational allocations, including dynamically inefficient ones. Constitutional rules, which give minorities veto power over fiscal policy changes proposed by the majority, are equivalent to precommitment. These rules eliminate fluctuating and dynamically inefficient transfers and sustain weakly increasing transfer sequences that converge to the golden rule. The golden rule allocation is the unique outcome of Markov constitutional rules.
“Social Security: A Financial Appraisal for the Median Voter”, Social Security Bulletin, June 2002, 64, 57-65.
Calculations of the median voter’s return from “investing” in Social Security suggest that for a majority of voters the U.S. Social Security system provides higher ex-post, or actual, returns than alternative assets.
“The Political Economy of Social Security: a Survey” European Journal of Political Economy, 18(1), 2002, pp. 1-29 (with P. Profeta).
This paper surveys the literature on the political economy of social security. We review models that address the following questions: (i) Why do social security programs that transfer resources from young and middle-aged workers to the elderly exist? (ii) What are the economic and political interactions between social security systems and other redistributive programs of the welfare state? (iii) How does political sustainability shape social security systems in a dynamic economic and demographic environment, and which social security reforms are politically feasible? We characterize this literature along two lines: economic factors and political institutions. We then assess the empirical relevance of the models by comparing their implications to stylized social security facts.
“The U.S. Social Security System: What Does Political Sustainability Imply?”, Review of Economic Dynamics 2, 1999, pp. 698-730.
This paper examines how political constraints can shape the social security system under different demographics. A steady-state mapping between relevant economic and demographic variables and the social security tax rate resulting from a majority voting is provided. I calibrate an OLG model to the U.S. economy. Calculations using census population and survival probabilities projections and 1961–96 labor productivity growth deliver a social security tax rate of 13.3% (currently 11.2%) and a 54% replacement ratio (51.7%). This result reflects the median voter's aging, from 44 to 46 years, which dominates the decrease in the dependency ratio, from 5.45 to 4.72.
“Constitutional “Rules” and Intergenerational Fiscal Policy”, Constitutional Political Economy, 9(1), 1998, pp. 67-74 (with C. Azariadis).
This paper analyzes the impact of alternative political institutions on sustainable fiscal policies. We study the choice of intergenerational transfers as outcomes of an infinite social security game among successive selfish median voters. Majoritarian systems accord the current median voter maximum fiscal discretion but no direct influence over future policy. This political arrangement sustains, among others, dynamically inefficient transfers and volatile, non-stationary sequences. Constitutional “rules” award to the minorities veto power over fiscal policy changes proposed by the majority. This unanimity provision is equivalent to partial precommitment. Under constitutional “rules,” sustainable fiscal policies feature Pareto efficient, non decreasing transfer sequences.