Prillaman, Soledad Artiz. Forthcoming. "The Micro-Foundations of Non-Contributory Social Policy in Latin America." In Social Policies and Decentralization in Cuba: Change in the Contest of 21st Century Latin America, ed. Jorge I. Domínguez, María del Carmen Zabala Argüelles, Mayra Espina Prieto, and Lorena Barberia. Cambridge, MA: David Rockefeller Center for Latin American Studies and Harvard University Press.

Social policy in Latin America has long been marked by a division between policy "insiders" and "outsiders", as defined by highly segmented labor markets. Prior to the late 1990's, social policy in Latin America was dominated by social insurance programs targeted exclusively at workers within the formal economy. As a result of this formal sector targeting, over 20% of the labor force in Latin America was not covered by social insurance programs. In the late 1990's and early 2000's a major shift in the targeting of social policies occurred with the introduction of non-contributory pensions, universal health coverage, and conditional cash transfer programs. What allowed for this erosion of traditionally cemented boundaries and the expansion of benefits to the informally employed? This paper argues that the end of protectionist economic policy led to a restructuring of industry and employment that broke down the barrier between the formal and the informal labor markets. As a result, the entrenched interests of the "insiders" saw marked changes in recent decades as formal labor force employees faced greater risk of unemployment and movement out of the formal labor force. This increased uncertainty over formal employment opportunities shifted the preferences of this politically salient population towards less corporatist social policies and instead towards more universal and redistributive social policies. Coupled with the surge in political participation of the "outsiders" as a result of democratization, this created a new left coalition capable of fundamental social policy change. Ultimately, this paper argues that non-contributory social policy implementation was the result of a shift in preferences of a politically pivotal group -- at-risk formal workers -- reacting in an economically self-interested way to changes in the structure of the economy, combined with a shift in power as the result of democratization.

Prillaman, Soledad Artiz and Kenneth J. Meier. 2014. "Taxes, Incentives, and Economic Growth: Assessing the Impact of Pro-business Taxes on U.S. State Economies." Journal of Politics 76(2): 364-379.
(Abstract) (Paper) (Replication Materials)(Coverage)
State fiscal policy frequently focuses on stimulating a healthy business environment with the assumption that this is linked with long-term economic growth. The conventional wisdom is that a state’s tax rates are negatively correlated with economic development, prompting states to decrease business-targeted taxes to stimulate the economy. Surprisingly, however, very few studies have documented the long-term effects of these tax policies on different facets of the state economy and overall business atmosphere. In short, we do not know how the level of business taxation actually affects the economies of states. Using panel data for all 50 U.S. states from 1977 to 2005, this article examines the impact of state business taxes on the overall economic position of the state, specifically looking at their effect on economic development and business growth. With an elaborate set of controls, the article finds that state business tax cuts have little to no positive impact on gross state product, job creation, personal income, poverty rates, and business establishments.

Working Papers

Strength in Numbers: How Women's Networks Close India's Political Gender Gap.
(Abstract) (Paper)

In India there persists a striking gender gap in political participation and representation, despite several decades of targeted policy interventions. Seminal theories of women's political participation fail to explain the political gender gap, and how it is reduced, in settings of restrictive, gender-biased social norms. I first propose an alternative model of local politics in the status quo, which explains women's non-participation as a function of ``family-centered clientelism." I then theoretically propose one potential solution forward – women's access to non-political networks of other women -- which I argue can lead to a shift in the political equilibrium under certain conditions where both men and women are active political participants. I test this potential mechanism for women's political empowerment using a geographic regression discontinuity design with pair-matched villages to identify the impact of a program aimed at mobilizing women into small collectives. Original survey data of 5,371 women and 2,399 men in 376 villages in rural Madhya Pradesh demonstrates that women who participated in this network intervention were significantly more active in local politics. Women's attendance at local public meetings is estimated to double and women were 11\% more likely to make a claim on the Sarpanch (local leader). I argue and empirically demonstrate that this network intervention has this effect by (1) incentivizing network, political mobilization, (2) transferring political information and skills, and (3) developing women's civic skills and confidence. I confirm with qualitative interview data. Contrary to conventional wisdom, I show no effect of the network intervention on income and further show income to be uncorrelated with political participation. These findings have implications for larger studies of political participation and importantly help to fill the gap in our understanding of gendered political behavior.

Let Them Eat Tax Credits: The distributional implications of state tax policy. (with Kenneth J. Meier)

State politicians wield substantial power over the distribution of income through their control of tax policy. As a result who bears the burden of taxes has long been a question of significant interest. Given the range of taxes that are set and implemented at the state level, the relationship between changes in tax policy and income inequality has important policy implications. Most scholarship focuses on the link between tax policy and the post-tax income distribution. However, this fails to capture how taxes shape market behavior and market inequality. Our focus on the relationship between tax policy and the pre-tax income distribution steps away from a simple understanding of how taxes may be used to redistribute income through their progressivity towards a deeper understanding of how public policy shapes incentives, behavior, and the market. How does the composition of tax policy ultimately affect income inequality and when does tax policy benefit the poor not only in design but also in practice? We argue that as states look to cut or raise taxes, the manner in which states choose their bundle of taxes and set tax policy will have significant distributional effects. Because changes to tax policy bear heavily on the delivery of public services, how the revenue is spent is also important for the resultant distribution of income. To evaluate these questions, we use the panel of U.S. states from 1980-2010 to analyze the relationship between the changes in tax policy and income inequality, considering also the role of the composition of expenditures in mediating this relationship.

Bonding Together or Bridging the Gap: Understanding the effect of social capital on income inequality.

In modern American society we know that social networks matter. How these networks matter is another story. The development of social capital has been linked to positive economic growth, however, the relationship between social capital and income inequality remains unclear. Over the past several decades, not only has the U.S. seen a major decline in social capital, but it has also reached unprecedented levels of economic inequality. Proponents for the renewal of social capital argue that informal networks, particularly those beyond the individual's immediate relations, extend opportunities and provide a connection between jobs and the unemployed. Critics, however, suggest that access to these networks is predetermined by socioeconomic status. Arguably,all positive benefits from these connections ultimately deepen these class divisions. Do social networks provide a means for access to jobs? Or do they stratify society into the haves and the have-nots? Until now, answering these questions was severely inhibited by the lack of data that spanned both time and space. Using a new measure of social capital, which accounts for this fundamental cross-temporal and cross-spatial variation, this study deciphers the intricate relationship between social capital and economic inequality across the U.S. states.

A Different Way of Modeling Differences: Applying Compositional Models to Differenced Variables. (with Jonathan Phillips)

Many political science theories predict how voter support changes between elections. However, standard empirical models rarely reflect the compositional and dynamic n-ture of electoral (and many other types of) data. Specifically, they overlook that vote share gains to one party are necessarily losses to another party. In multi-party systems, ignoring the compositional nature of the data introduces bias to our estimates and produces non-sensical model predictions. To accurately understand voting motivations using dynamic data, statistical models must account for this implicit covariance. We propose a method that extends existing compositional models to capture changes in vote share between elections and we develop diagrammatic tools that support intuitive analysis of vote swings between parties. Moreover, by accurately modeling thecovariance structure of the data we identify new tests for discriminating between alternative hypotheses. We show how this can radically change our understanding of voter motivations in an applied example.

A Political Economy Approach to Globalization and the Welfare State: Immigration, Labor Market Dynamics, and Welfare Generosity. (with Ling Zhu)

With globalization at the forefront of intellectual debates in social policy research, a general theoretical framework is needed to understand welfare policies across the globe. We seek to do just that by providing a political economy theory of welfare state generosity. The crux of our explanation of welfare state generosity lies in immigration and its influence through domestic labor markets. In this paper, we examine how immigration changes the structure of domestic labor markets, and as a result the generosity of social protection provision. We argue that the skill profile of a country is a function of immigration flows. When the skill composition of immigrants aligns with that of the existing domestic labor force, the relative power of labor to demand institutions of protection increases. At the same time, however, the pool of workers competing for similar jobs increases, resulting in an overall rise in labor market risk. Using the sample of OECD countries, this paper empirically explores the link between immigration, domestic labor market and welfare generosity. By analyzing cross-country data from 1971 to 2010, we highlight the important indirect effects of immigration onsocial protection programs.

Private Transfers and Public Spending: The impact of private substitutes to redistribution in the developing world.

Increasingly international organizations have taken a keen interest in international distributive justice and global poverty alleviation. Over the last several decades, these initiatives have transferred considerable resources and funds to developing nations in the hope of aiding in redistributive efforts. Many scholars of economic development have analyzed the efficacy of these private transfers and their effects on the lives the poor, however, few have considered the impact of these transfers on the politics of redistribution within the recipient country. To truly understand the net effectiveness of these development initiatives, it is imperative to consider the indirect effect they have on government spending and redistribution. I argue that these international transfers are direct substitutes for public redistributive spending, and, as a result, disincentivize developing nations from building strong welfare states. Although at a micro-level these initiatives may directly increase the skills and incomes of the poor, their net effect on social welfare, once redistributive spending is considered, may be negligible. This paper endeavors to understand how international private transfers to the poor affect both the level and composition of redistributive spending. Only by accounting for the indirect effects of development and poverty relief initiatives can we identify their net effectiveness and begin to comprehend the dynamics of government redistribution in the developing world.