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1. Essays in social policy

Author

Ganslmeier, Michael and Vlandas, Timothee

Abstract

This dissertation explores the political determinants and consequences of social policies in advanced economies. In its four papers, it aims to contribute to our understanding of how social policies influence the political and electoral behaviour of voters as well as the ways in which electoral outcomes determine social policies. Paper 1 investigates the statistical sources of model uncertainty in the literature of welfare state determinants. It approaches this issue by quantifying the sensitivity of empirical estimates towards different model specification choices, including the control variable set, the fixed effect structure, the standard error type, the country sample, the period sample and the operationalisation of the dependent variable. By developing an Augmented Extreme Bounds Analysis (A-EBA) method combined with a grid-search deep learning approach, the paper reveals that the selection of the country and period sample and the operationalisation of welfare state generosity has a substantially larger impact on the coefficients and standard errors in generosity estimations than the control set. Paper 2 quantifies the electoral returns to campaign promises on social benefit expansions. By applying a discontinuity-based research design on survey data in Germany, the results show that promises on pension benefit expansions swing voters to the pledge-making party. This alignment gain, however, is only transitory as the effect diminishes shortly after pledge fulfilment suggesting that even unbroken promises on very generous welfare state policy expansions do not yield long-term political support. Paper 3 measures the mobilising effect of pension benefit expansions in the US. The paper matches voting records with a large administrative dataset on pension payments to retired public employees in Illinois. The results of a discontinuity-based research design show that pension benefits increase electoral participation in the short run among Democrat voters, particularly among those with lower levels of income. In contrast, Republican and/or unaffiliated voters remain unresponsive. Thus, the results suggest that policy feedbacks depend strongly on voters' ideological and material predisposition. Paper 4 examines whether the provision of social benefits and assistance programmes can mitigate the political costs of unpopular policies, such as climate change policies. By applying an instrumental variable approach to a dataset covering a large set of advanced economies over time, the estimates show that the welfare state can be a viable tool to prevent electoral punishment the incumbent receives for passing unpopular policies. These findings highlight that the welfare state can generate the political and electoral support that is necessary for urgently needed measures in times of global warming.

Published
2023

6. Initial output losses from the Covid-19 pandemic: Robust determinants

Author

Furceri, Davide, Ganslmeier, Michael, Ostry, Jonathan David, and Yang, Naihan

Subjects
WALS, ddc:330, COVID-19, BMA, model averaging, E02, recession, G01, resilience, health care economics and organizations
Abstract

While the COVID-19 pandemic is affecting all countries, output losses vary considerably across countries. We provide a first analysis of robust determinants of the observed initial output losses using model-averaging techniques-Weighted Average Least Squares and Bayesian Model Averaging. The results suggest that countries that experienced larger output losses are those with lower GDP per capita, more stringent containment measures, higher deaths per capita, higher tourism dependence, more liberalized financial markets, higher pre-crisis growth, lower fiscal stimulus, higher ethnic and religious fractionalization, and more democratic regimes. With respect to the first factor, lower resilience of poorer countries reflects the higher economic costs of containment measures and deaths in such countries and less effective fiscal and monetary policy stimulus.

Published
2021

7. Public attention and policy responses to COVID-19 pandemic⋆

Author

Aksoy, Cevat Giray, Ganslmeier, Michael, and Poutvaara, Panu

Subjects
Government, Death toll, Coronavirus disease 2019 (COVID-19), Policy implementation, Development economics, Pandemic, Psychological intervention, Business, Public attention, Institutional quality
Abstract

Early non-pharmaceutical interventions (NPI) significantly reduced the death toll of the COVID-19 pandemic. Yet, there are vast differences in how quickly governments implemented NPIs. In this paper, we analyze the role of public attention, measured as the share of daily Google searches in a country related to COVID-19, in the timing of the NPI responses. We first show that public attention depends strongly on whether there are cases in own country. We then show that countries with high levels of public attention are more likely to implement non-pharmaceutical interventions, even after controlling for the number of cases and deaths. Finally, we show that the extent to which a government responds to public attention is highly dependent on the country’s institutional quality. The positive effect of public attention on policy implementation is driven entirely by countries with good institutions.

Published
2020

10. Are climate change policies politically costly?

Author

Furceri, Davide, Ganslmeier, Michael, Ostry, Jonathan, Furceri, Davide, Ganslmeier, Michael, and Ostry, Jonathan

Abstract

Are policies designed to avert climate change (Climate Change Policies, or CCPs) politically costly? Using data on governmental popular support and the OECD's Environmental Stringency Index covering 30 countries between 2001 and 2015, our results show that CCPs are not necessarily politically costly: policy design matters. First, in contrast to non-market-based CCPs (such as emission limits), only market-based CCPs (such as emission taxes) entail political costs for the government. Second, the effects are only present when CCPs are adopted during periods of high oil prices, prior to elections, or in countries depending strongly on non-green (dirty) energy sources. Third, CCPs are only politically costly when inequality is high and/or social insurance/transfer does not sufficiently address the regressivity of CCPs. Our results are robust to numerous robustness checks including to address concerns related to endogeneity issues.

11. Structural reforms in Europe: lessons from early experiences

Author

Campos, Nauro F., De Grauwe, Paul, Ji, Yuemei, Saka, Orkun, Martelli, Angelo, Ganslmeier, Michael, Campos, Nauro F., De Grauwe, Paul, Ji, Yuemei, Saka, Orkun, Martelli, Angelo, and Ganslmeier, Michael

Abstract

It has long been argued that structural reforms constitute a remedy for getting countries out of the low-growth environment that Europe has experienced in the last decade. Many recent studies show long-term benefits of such reforms in cross-country settings, but ignore the heterogeneity across different country experiences. To address this gap in the context of the European Union, we focus on the largest early reforms that its four members (Denmark, France, Greece and Portugal) adopted in financial and labour markets. By using a Synthetic Control Method, we find that many of these early reform episodes do not seem to have been as fruitful as their advocates claimed at the time. Our results indicate a rather mixed relationship between reforms and several macro measures, including economic growth and inequality. Reforms, especially when introduced all at once as a big-bang, do not seem to always produce the intended results.

12. Social distancing measures: warmer temperatures have a substantial effect on non-compliance among certain groups

Author

Ganslmeier, Michael, Van Parys, Jonathan, Vlandas, Tim, Ganslmeier, Michael, Van Parys, Jonathan, and Vlandas, Tim

Abstract

Despite the success of COVID-19 vaccination campaigns across the world, the emergence of new strains of the virus may delay the relaxation of certain lockdown measures. Michael Ganslmeier, Jonathan Van Parys and Tim Vlandas argue that understanding individual-level compliance with social distancing rules will be essential in the coming months – especially as compliance with public health guidelines is substantially lower among certain groups during warmer periods of the year.

13. Who complies with lockdown measures in the UK?

Author

Ganslmeier, Michael, Van Parys, Jonathan, Vlandas, Tim, Ganslmeier, Michael, Van Parys, Jonathan, and Vlandas, Tim

Abstract

Despite the success of Covid-19 vaccination campaigns across the world, the emergence of new strains of the virus may delay the relaxation of social distancing and other lockdown measures. Michael Ganslmeier, Jonathan Van Parys and Tim Vlandas argue that understanding individual-level compliance with social distancing rules will be essential in the coming months – especially as compliance with public health guidelines is substantially lower among certain groups during warmer periods of the year.

14. Labour market regulation and tax reform complement each other

Author

Martelli, Angelo, Campos, Nauro F., Ganslmeier, Michael, Ji, Yuemei, Saka, Orkun, Martelli, Angelo, Campos, Nauro F., Ganslmeier, Michael, Ji, Yuemei, and Saka, Orkun

Abstract

Italy and Spain show how this complementarity helps reduce labour market dualism, and fosters job growth, write Angelo Martelli, Nauro Campos, Michael Ganslmeier, Yuemei Ji, Orkun Saka

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