Essays on Applied Microeconometrics

154 Pages·2015·4.3 MB·English

Essays on Applied Microeconometrics

Miguel Ángel Borrella Mas
Departamento de Fundamentos del Ana´lisis Econo´mico
Facultad de Ciencias Econo´micas y Empresariales
Essays on Applied Microeconometrics
´
Miguel Angel Borrella Mas
Memoria presentada para aspirar al grado de
DOCTOR POR LA UNIVERSIDAD DE ALICANTE
Menci´on de Doctor Internacional
Doctorado en Econom´ıa Cuantitativa
Dirigida por:
Prof. Mar´ıa Dolores Collado Vindel
EstatesishasidoelaboradaconelapoyodeunabecaFPUconcedidaporelMinisteriodeEducaci´on,CulturayDeporte.

If you think education is expensive, try ignorance - Derek Bok

Acknowledgements
Though only my name appears on the cover of this thesis, it could not have been performed if not
for the assistance, patience and support of many individuals.
First of all, my deepest gratitude is to my advisors, Mar´ıa Dolores Collado Vindel and Marcello
Sartarelli,fortheiradviceandmentoringwhiledevelopingthisthesis. Ihavebeenincrediblefortunate
to have such advisors, who gave me the freedom to explore on my own while providing the necessary
guidance to recover when my steps hesitated.
IwouldalsoliketothankallfellowstudentsandfacultyintheQuantitativeEconomicsDoctorate
within the University of Alicante, for creating such a great environment in an international context
with an important mixture of students and researchers from universities all over the world. I would
alsoliketoextendmyappreciationtotheadministrativestaffofthedepartmentfortheirkindservice
and assistance. A special mention goes to Mih´aly Borsi, Germ´an L´opez and Inna Tsener for having
shared an amazingly intense year with a happy ending for all.
I am extremely thankful and indebted to Marcos Vera and the Economics Department of Uni-
versity College London for hosting me as a visiting scholar. The highly qualified environment of the
institution, the discussion of new ideas and the direct contact with the influence of another academia
had with no doubt a stunning positive impact on the quality of this dissertation.
Many friends and kids of whom I am monitor have helped me stay focus and sane through these
difficult years. I greatly value their friendship and fondness, and I deeply appreciate their belief in
me. Last but not least, I would like to express my heartfelt gratitude to my family without whose
love, support and understanding I could never have reached this goal in my life.
Miguel A´ngel Borrella Mas
Alicante, December 2015

Contents
Acknowledgements v
Introducci´on 1
Introduction 13
1 Non-Contributory Pensions and Households’ Decisions. Evidence from Bolivia 17
1.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
1.2 Institutional setting and data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
1.3 Conceptual framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
1.4 Research design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
1.4.1 Regression discontinuity design . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
1.4.2 Estimation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
1.5 Results. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
1.6 Research design validity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
1.6.1 Forcing variables and baseline characteristics . . . . . . . . . . . . . . . . . . . 40
1.6.2 Falsification test . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
1.7 Conclusion and discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
1.8 Appendix 1A: Pension effect jointly on multiple outcomes . . . . . . . . . . . . . . . . 49
1.9 Appendix 1B: Robustness checks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
2 Partisan Alignment and Political Corruption. Theory and Evidence from Spain 57
2.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
2.2 Theoretical framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
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viii CONTENTS
2.2.1 A career concerns model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
2.2.2 Corruption in equilibrium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
2.3 Institutional setting and data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
2.3.1 The Spanish local political system . . . . . . . . . . . . . . . . . . . . . . . . . 65
2.3.2 Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
2.4 Empirical strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
2.5 Results. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
2.5.1 Main results. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
2.5.2 PP and PSOE effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
2.5.3 Additional heterogeneous effects . . . . . . . . . . . . . . . . . . . . . . . . . . 81
2.5.4 Robustness checks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
2.5.5 Validity of the results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
2.6 Conclusion and discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
2.7 Appendix 2A: Theoretical predictions when β = 1 . . . . . . . . . . . . . . . . . . . 89
2
2.8 Appendix 2B: Alignment effect using RDD techniques . . . . . . . . . . . . . . . . . . 90
3 Partisan Alignment and the Political Budget Cycle. Evidence from Spain 92
3.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
3.2 Data and research design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
3.2.1 Variables of interest and sample selection . . . . . . . . . . . . . . . . . . . . . 95
3.2.2 Regression discontinuity design . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
3.2.3 Estimation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
3.3 Results. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
3.3.1 Discontinuity in the probability of alignment . . . . . . . . . . . . . . . . . . . 103
3.3.2 Main results. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
3.3.3 Robustness checks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
3.4 Research design validity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
3.4.1 Forcing variable and baseline characteristics . . . . . . . . . . . . . . . . . . . . 120
3.4.2 Falsification test . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
3.5 Conclusion and discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
Bibliography 128
List of Figures
1.1 Illustration of the time at which eligibility for the pension and outcomes are measured 22
1.2 Variation in spouses’ age in a household . . . . . . . . . . . . . . . . . . . . . . . . . . 26
1.3 Short-term pension effect at the age 60 cutoff using the optimal bandwidth . . . . . . 35
1.4 Age distribution for the short-term effect (September-end) . . . . . . . . . . . . . . . 42
2.1 Partisan alignment by municipalitiy . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
2.2 RDD estimates of the effect of partisan alignment on corruption . . . . . . . . . . . . 91
3.1 Discontinuity in the probability of alignment . . . . . . . . . . . . . . . . . . . . . . . 103
3.2 Alignment effect on political budget cycle . . . . . . . . . . . . . . . . . . . . . . . . . 108
3.3 Robustness of the alignment effect to varying the bandwidth . . . . . . . . . . . . . . 116
3.4 Seats margin distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
ix