November 13, 2015
Thomas Lemieux, University of British Columbia and NBER, and Craig Riddell, University of British Columbia
In this paper, Lemieux and Riddell look at the evolution of incomes at the top of the distribution in Canada. Master files of the Canadian Census are used to study the composition of top income earners between 1981 and 2011. The researchers' main finding is that, as in the United States, executives and individuals working in the financial and business services sectors are the two most important groups driving the growth in top incomes in Canada. A finding more specific to Canada is that the oil and gas sector has also played an important role in income growth at the top, especially in more recent years. Another arguably Canadian-specific finding is that holders of medical degrees have lost ground compared to other top income earners. Finally, despite the IT revolution, scientists, engineers and even computer scientists do not account for much of the growth in top incomes in Canada.
Danny Yagan, University of California, Berkeley and NBER
Gordon Dahl, University of California, San Diego and NBER, and Magnus Carlsson and Dan-Olof Rooth, Linnaeus University
A large theoretical and empirical literature explores whether politicians and political parties change their policy positions in response to voters preferences. This paper asks the opposite question: do political parties affect public attitudes on important policy issues? Problems of reverse causality and omitted variable bias make this a difficult question to answer empirically. Carlsson, Dahl, and Rooth study attitudes towards nuclear energy and immigration in Sweden using panel data from 290 municipal election areas. To identify causal effects, the researchers take advantage of large nonlinearities in the function which assigns council seats, comparing otherwise similar elections where one party either barely wins or loses an additional seat. The authors estimate that a one seat increase for the anti-nuclear party reduces support for nuclear energy in that municipality by 18%. In contrast, when an anti-immigration politician gets elected, negative attitudes towards immigration decrease by 7%, which is opposite the party's policy position. Consistent with the estimated changes in attitudes, the anti-nuclear party receives more votes in the next election after gaining a seat, while the anti-immigrant party experiences no such incumbency advantage. The rise of the anti-immigration party is recent enough to permit an exploration of possible mechanisms using several ancillary data sources. The authors find causal evidence that gaining an extra seat draws in lower quality politicians, reduces negotiated refugee quotas, and increases negative newspaper coverage of the anti-immigrant party at the local level. The researchers' finding that politicians can shape public attitudes has important implications for the theory and estimation of how voter preferences enter into electoral and political economy models.