PublicationWorking paper

Ratio Working Paper No. 240: Bloc – party Politics and Economic Outcomes. What Are the Effects of Local Parties?

Abstract

In a much cited 2008 article, Per Pettersson-Lidbom uses regression discontinuity to test for Swedish party effects on economic policies such as municipal taxation, spending and employment. We reassess the issue using the same estimator as Pettersson-Lidbom but new data on all factual coalitions, including minority coalitions as well as those previously deemed as undefined on a left and right wing political scale (constituting about 20 percent of the sample used in Pettersson-Lidbom’s study). This makes it possible to remove a systematic bias against centre-right coalitions in Pettersson-Lidbom’s study. We find that a majority of the previous findings stand, with sometimes even slightly stronger effects, but not as regards the proportional income tax rate and number of government employees per capita. Parties seem to matter for economic outcomes, but not always, and some parties more than others.

Lakomaa, E. & Korpi, M. (2014). Bloc – party Politics and Economic Outcomes. What Are the Effects of Local Parties? Ratio Working Paper No. 240.

Details

Author: Lakomaa, E. & Korpi, M.
Publication year: 2014
Published in: Ratio Working Paper

Similar content

City size, employer concentration, and wage income inequality

Halvarsson, D., & Korpi, M.

Publication year

2025

Published in

Institute for Evaluation of Labour Market and Education Policy (IFAU)

Abstract

This study investigates the relationship between the urban wage premium and employer concentration using Swedish full population employer-employee data. Departing from an AKM modeling framework to distinguish worker from firm specific heterogeneity – a measure of rent-sharing – we then measure the urban wage premium using differences in the estimated firm fixed effects at the level of local industries, nested within local labor markets. Our results suggest that labor market employer concentration, as calculated using the Hirschman-Herfindahl index and a leave-one-out instrumental variable design, can account for a significant share of the estimated urban wage premium (UWP). Addressing city-level wage income inequality by applying our model to different segments of the local labor market income distribution, we find that while the UWP pertains to all income segments, it is largest for top-income levels (above the 90th percentile), and within this segment employer concentration also has the largest explanatory power. Thus, while being an important explanatory factor for all percentiles of the local income distribution, a relatively lower employer concentration within larger cities, and vice versa, higher concentration within smaller cities, primarily help explain the variance of top wages within these cities/labor markets.

Article (with peer review)

Introducing the inverted Icarus paradox in business history – Evidence from David and Goliath in the Swedish telecommunications industry 1981–1990

Eriksson, K.; Lakomaa, E.; Nykvist, R.; Sandström, C.

Publication year

2024

Published in

Business History, Advance online publication.

Abstract

Previous research in business and management history has identified the Icarus paradox, which describes how organisations may fall due to overconfidence and hubris. We build upon previous research on paradoxes in business history and introduce the notion of an inverted Icarus paradox. Using rich archival sources coded in a relational database, we show how an entrant firm, Comvik, outmanoeuvred an established government monopoly in the non-market domain from 1980 to 1990, despite inferior resources and a weak market position. The government monopoly Televerket faced an inverted Icarus paradox; it could not leverage its strengths and political connections as they were stuck in a David versus Goliath narrative where public opinion was more sympathetic to the entrant firm Comvik.

Ratio Working Paper No 363: City Size, Employer Concentration, and Wage Income Inequality

Korpi, M., & Halvarsson, D.

Publication year

2023

Published in

Rati Working Paper Series.

Abstract

In this paper, we build upon a monopsony framework, suggested by Card et. al. 2016, which links firm level productivity and rent-sharing to wage inequality. Specifically, our research questions address i) to which extent labor market concentration across firms (within different types of locally situated industries) affects variation in wages among workers within these firms and industries, and ii) how this variation in turn spills over into economy-wide inequality (measured at the level of local labor markets). Using linked employer-employee full population data for Sweden, and an AKM modelling framework to separate between worker- and firm-level heterogeneity, our results suggest that higher firm-level fixed effects (a measure of rent-sharing) is associated with lower labor market employer concentration, something which affects average wage income among firms accordingly. Addressing wage income inequality by applying our model to different segments of the local labor market income distribution, we find that reduced average employer concentration in larger cities accounts for almost all variation in the (positive) link between city size-and wage inequality, except for the largest metropolises where it captures around 30-50 percent of variation depending on the income segment that we focus on.