Expected Benefits of Voting and Voter Turnout

This empirical study seeks to identify key aggregate-level economic and non-economic determinants of the expected benefits from voting and hence aggregate voter turnout. A unique dimension of this study is the hypothesis that PAC (political action committee) election campaign contributions, e.g., to U.S. Senate races, may reduce the expected benefits of voting and hence voter turnout because the greater the growth of real PAC contributions, the greater the extent to which eligible voters may become concerned that these contributions lead to PAC political influence over elected officials. Indeed, this study finds for the period 1960-2000 that the voter participation rate has been negatively impacted by the growth in real PAC contributions to Senate election campaigns. Another interesting finding is that voter turnout is directly/positively related to strong public approval or strong public disapproval of the incumbent President. This study also finds that the voter participation rate has been positively impacted by the opportunity to vote in Presidential elections, the Vietnam War, a “too slowly” growing real GDP, and inflation rates when they exceed five percent per annum. Furthermore, this study also finds the voter participation rate to have been negatively impacted by the public’s general dissatisfaction with government.

The Relative Tax Gap Hypothesis: An Exploratory Analysis and Application to U.S. Financial Markets

This study empirically investigates the “relative tax gap hypothesis,” which posits that the greater the size of the relative tax gap, the greater the degree to which the U.S. Treasury must borrow from domestic and/or other credit markets and hence the higher the ex ante real interest rate yield on the Bellwether 30 year U.S. Treasury bond. The study uses the most current data available for computing what is referred to here as the “relative tax gap,” which is the ratio of the aggregate tax gap (the loss in federal income tax revenue resulting from personal income tax evasion) to the GDP level. For each year of the study period, the nominal value of the tax gap is scaled by the nominal GDP level and expressed as a percentage. The study period runs from 1982 through 2016, reflecting data availability for all of the variables. The estimation results provide strong support for the hypothesis. In addition, in separate estimations, evidence is provided that the relative tax gap also acts to elevate the ex ante real interest rate yield on Moody’s Baa-rated long-term corporate bonds. It logically follows, then, that to the extent that a greater relative tax gap leads to higher ex ante real interest rates, it may contribute to the crowding out of corporate investment in new plant equipment associated heretofore with government budget deficits per se

Post-Great-Recession Human Migration Patterns in the U.S.: The Overlooked Impacts of Entrepreneurial Activity and Personal Freedom

Effectively no scholarly research has been published in peer-reviewed journals on the potential migration impacts of environments that are more conducive to entrepreneurship. Similarly, the potential migration impact of personal freedom also is essentially ignored in the literature. This study seeks to add to the literature by investigating the impacts of both entrepreneurial activity and personal freedom on state in-migration patterns. Using a panel dataset for the post-Great Recession period 2010-2017, the empirical analysis reveals that all three of the Kauffman indices of entrepreneurial activity are found to exercise a positive and statistically significant impact on both net in-migration and gross in-migration. In addition, the index of overall personal freedom is found to exercise a positive and statistically significant impact on both of these in-migration measures. Thus, it appears that there may be good reason for future migration studies to take such variables into account when seeking to explain, understand, and predict migration patterns in the U.S

Migration, the Quality of Life, and Economic Opportunities in the U.S. Revisited: Impacts of Round-Trip Work Commute Time and Rent or Single-Family Housing Prices

Given the importance to businesses of having a better understanding of factors that influence migration, this study argues that there are two dimensions of the quality of life and economic opportunities that have largely been ignored in previously published studies of migration patterns in the U.S.: the impacts of (1) the costs of commuting between one’s residence and one’s place of employment and (2) apartment rent-levels and single-family housing price levels. It is hypothesized here that the greater the commute time between one’s prospective place of residence and one’s prospective place of employment, the greater the costs associated with in-migration to that potential residence in terms not only of the value of time expended round-trip in commuting but also the opportunity costs and mental health costs (stress) of that time along with the greater pecuniary costs that accompany longer commutes. Therefore, it is hypothesized that in-migration to an area is a decreasing function of commute time associated with that area. A second hypothesis proffered here is that greater housing-cost levels reduce disposable real income and hence utility. More specifically, we argue that either higher apartment rent levels or higher prices on single family homes reduce disposable real income and thereby reduce household well-being; hence, in-migration to an area is hypothesized to be a decreasing function of those higher rent levels and higher home prices. Based upon panel 2SLS estimates, where net in-migration and gross in-migration over the 2010-2017 period are separately considered, there is strong initial empirical support for both hypotheses

Where Has The Currency Gone? And Why? The Underground Economy And Personal Income Tax Evasion In The U.S., 1970-2008

Unaccounted for currency in the U.S. is argued to reflect the presence of widespread income tax evasion. This empirical study seeks to identify determinants of the underground economy in the U.S. in the form of federal personal income tax evasion over the period 1970-2008. In this study, we use the most recent data available on personal income tax evasion, data that are derived from the General Currency Ratio Model and measured in the form of the ratio of unreported AGI (adjusted gross income) to reported AGI. Other studies of federal income tax evasion for the U.S. are dated and do not use data this current. It is found that personal income tax evasion was an increasing function of the maximum marginal federal personal income tax rate, the percentage of federal personal income tax returns characterized by itemized deductions, and unpopular military engagements, in this case, the War in Iraq, and a decreasing function of the Tax Reform Act of 1986 (during its first two years of being implemented), the ratio of the tax free interest rate yield on high grade municipals to the interest rate yield on ten year Treasury notes (as a measure of the incentive effect of a better return to tax avoidance, which is legal), and higher audit rates of filed federal income tax returns (as a measure of risk from tax evasion) by IRS personnel

An Empirical Analysis of the Effects of Budget Deficits (Total and Primary) and Personal Income Tax Rates on the Ex Post Real Interest Rate Yield on Long-Term U.S. Treasury Bonds

This empirical study adopts an open-economy loanable funds model to investigate the impact of post-Bretton Woods U.S. federal government budget deficits and personal income tax rates on the ex post real interest rate yield on thirty-year Treasury bonds. In this study, the budget deficit is measured in two different ways, the total (“unified”) budget deficit and the primary deficit (the total/unified deficit minus net interest payments). Two different estimation techniques, autoregressive two stage least squares estimation and the ARCH (Autoregressive Conditional Heteroscedasticity) Method, for the 1973-2016 study period provide evidence that the ex post real interest rate yield on thirty-year Treasury bonds has been an increasing function of both federal budget deficit measures (expressed as a percent of GDP) and the maximum marginal federal personal income tax rate. The estimations all imply that elevating either the total/unified or primary federal budget deficit appears to raise the cost of borrowing in the U.S., whereas reducing the maximum marginal personal income tax rate appears to reduce the cost of borrowing. Given the potential effects of longer-term real interest rates on investment in new plant and equipment and overall economic growth, policy-makers should not overlook these findings

Female Labor Force Participation and Voter Turnout: Evidence from the American Presidential Elections

This study investigates a state-level panel dataset for the five most recent U.S. Presidential elections, namely, 2000, 2004, 2008, 2012, and 2016, for which all data needed to reflect all of the variables in the model are available. While the general objective is to shed further insights into identifying factors that in a contemporary setting influence the aggregate voter participation rate in such elections, the emphasis is on the impact of the female labor force participation rate, which is hypothesized, ceteris paribus, to positively affect aggregate voter turnout. Several Cross Section Random Effects estimates are undertaken, each of which supports the hypothesis. Indeed, the semi-log estimate implies that a one unit (one percentage point) higher level for the female labor force participation rate in a state is associated with a 0.61% higher overall voter turnout in the state. Although the nation’s female labor force participation rate in the U.S. has effectively stabilized, there is considerable interstate variation in this variable; thus, candidates for elected office in states with higher female labor force participation rates and/or growing female labor force participation rates would be well advised to be sensitive to the needs of this demographic when campaigning

Do Lawyers Inhibit Economic Growth? New Evidence from the 50 U.S. States

Whether the activities of lawyers might hamper economic growth has been hotly contested over the past three decades. Contradictory conclusions have flowed from evidence that typically has focused on the impact of lawyers on the growth rates of countries. Disputes over definitions and samples that vary among countries have colored portions of these debates. We surmount many of these issues by adopting a 50-state panel covering the period 2005-2018 for the United States and by utilizing widely accepted variables regarding economic activity and who is considered a lawyer. Further, we utilize two distinct measures of the activity of lawyers and find that an increased presence of lawyers reduces per capita real economic growth. Separately, we also find that an increased presence of lawyers reduces the level of per capita real income