Tax evasion costs the United States hundreds of billions of dollars every year.
But for some Americans, hiding income from the government is about more than keeping every possible penny they earned for themselves. It’s also a form of political protest.
In a paper in the American Economic Journal: Economic Policy, authors Julie Berry Cullen, Nicholas Turner, and Ebonya Washington investigate whether attitudes toward government cause Americans to evade paying personal income taxes.
They found that when a new president entered office, taxpayers in counties on the opposite side of the political aisle appeared less willing to share their earnings with the government.
Conversely, those who were politically aligned with the new president were more trusting of how their taxes would be spent.
Cullen and Washington spoke with Chris Fleisher about the challenges of researching tax evasion, the importance of public trust in government, and the implications of their findings in a hyperpolarized time.
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Ep. 44: Inverted outcomes resulting from the Electoral College system
22:20Only four times in US presidential history has the candidate with fewer popular votes won the election. Two of those occurred recently in 2000 and 2016, leading to calls to reform the system. Far from being a fluke, this peculiar outcome of the US Electoral College has a high probability in close races, according to a paper in the American Economic Journal: Applied Economics. Authors Michael Geruso, Dean Spears, and Ishaana Talesara say that regardless of changes in demographics and institutions, the odds of so-called inverted elections in close races has been about the same over the last 200 years. Geruso says that while Republicans benefit today from the chance of an inverted election, it hasn’t always been that way. He recently spoke with Tyler Smith about why the Electoral College causes inversions and what he thinks about moving to a national popular vote.
Inoculating adolescents, protecting the public
20:39This is a rebroadcast of a conversation that Chris Fleisher had with University of Georgia professor Emily Lawler back in 2019 about her research on vaccine mandates for adolescents.
Ep. 43: The long-run benefits of public preschool
14:31Head Start was launched nearly sixty years ago as part of the United States’ War on Poverty. Since then, it has helped prepare millions of kids for first grade. The architects of the program hoped that putting disadvantaged children on more equal footing with their better-off peers would set them up for future success. But the long-run impacts are only now becoming clear. In a paper in the American Economic Review, authors Martha J. Bailey, Shuqiao Sun, and Brenden Timpe found that Head Start significantly boosted educational attainment and economic self-sufficiency later in life. The returns were so great that the program more than paid for itself. Bailey says their findings offer important insights into evaluating large-scale social programs, especially those that invest in people while they are young. She recently spoke with Tyler Smith about the long-term effects of Head Start and its lessons for early childhood intervention programs.
Ep. 42: Reimagining public safety research
26:21The Black Lives Matter movement has sparked a national conversation around police reform, with proposals ranging from reallocating resources to outright abolition of local departments. Economists could help inform these discussions. But critics say existing economic research falls short of understanding the true impacts of policing on communities. In a paper in the Journal of Economic Perspectives, Yale sociologist Monica C. Bell offers proposals for how economists can deepen their understanding of policing and public safety. She says a good first step is to separate those two concepts. Bell recently spoke with Chris Fleisher about how focusing on crime limits our understanding of the way policing shapes communities, why more research is needed on community-based safety programs, and how qualitative approaches can inform research based on big data.
Ep. 41: Divergences in life expectancy across US states
21:17With advances in modern medicine, US life expectancy steadily improved over the second half of the 20th century. But that progress masked a growing gap in mortality between poorer and richer states that started in the 1980s. The exact reasons for this divergence are still unknown, but a paper in the Journal of Economic Perspectives helps rule out some possibilities and provides guidance about where to look next. Authors Benjamin K. Couillard, Christopher L. Foote, Kavish Gandhi, Ellen Meara, and Jonathan Skinner say that two types of explanations stand out. On the one hand, previous research has found numerous ways that state institutions and policies have affected health outcomes. And on the other hand, there are reasons to believe that behavior and culture also contribute to mortality differences. Disentangling these two strands may be a significant challenge for future research, according to the authors.Meara, who is Professor of Health Economics and Policy at Harvard, and Foote, who is Senior Economist at the Federal Reserve Bank of Boston, recently spoke with Tyler Smith about rising geographic disparities in US mortality.The edited highlights of that conversation are below, and the full interview can be heard using the podcast player. [Note: The views expressed herein are solely those of the authors and do not necessarily represent the views of the Federal Reserve System or the Boston Fed.]
Ep. 40: The recovery of Southern wealth after the Civil War
25:47The American Civil War and emancipation ended chattel slavery, and as a result, substantially reduced the fortunes of slaveholding households in the years immediately following the war. In a paper in the American Economic Review, authors Philipp Ager, Leah Boustan, and Katherine Eriksson find that many White former slave-owning households rebuilt much of their lost wealth in just one generation, and within two generations, most had recovered entirely. According to the authors, this rapid recovery was made possible by non-material advantages, such as social networks and political connections, which persisted in spite of the large loss of wealth. The research challenges common narratives around the South’s recovery from the Civil War by documenting the persistence of much of the wealth created from chattel slavery. Boustan recently spoke with Chris Fleisher about how she and her coauthors approached their research and what their findings say about wealth and inequality.
Ep. 39: Deterring crime with DNA databases
20:26DNA databases have become essential for solving crimes with few to no leads. But their benefits extend beyond finding suspects. They provide a powerful tool for preventing crimes from happening in the first place, according to a paper in the American Economic Journal: Applied Economics. Authors Anne Sofie Tegner Anker, Jennifer L. Doleac, and Rasmus Landersø found that the expansion of DNA databases in Denmark led to a sharp reduction in recidivism. While some citizens worry about potential abuse of this surveillance tool, the effectiveness of registering offenders in DNA databases stands out compared to traditional policing measures. Professor Doleac recently spoke with Tyler Smith about how DNA registration deters crime and how policymakers should weigh the tradeoff between privacy and effective policing measures.
Ep. 38: Growth by proximity
23:44Austin was a laid-back college town in the 1980s when a student at the University of Texas named Michael Dell began selling computers from his dorm room. At the time, Texas’s capital city was perhaps known more for high hats than high-tech. But the company Dell started would become the world’s largest PC maker and attracted a slew of talent that turned Austin into a technology hub. Enrico Moretti has studied how these “agglomeration economies” develop and the ways they drive growth. In a paper in the American Economic Review, he says that inventors produce more patented research when surrounded by other top talent in their field. He also says that tech clusters will continue to thrive after the pandemic, despite speculation that they will be less relevant in a world of more remote work. Moretti spoke with Chris Fleisher about agglomeration and what the case study of Kodak in Rochester, New York, can tell us about how clusters affect innovation.
Ep. 37: Going from gasoline to electric
21:33Countries around the world are contemplating aggressive plans to curb CO₂ emissions in the coming decades. Many see the electrification of the transportation sector as the first step, but in a paper in the American Economic Journal: Economic Policy, economist Stephen P. Holland warns against using simple bans on the sale of gasoline vehicles to achieve that goal. Holland and coauthors Erin T. Mansur and Andrew J. Yates analyzed a range of policies to encourage the transition from gas powered vehicles to electric vehicles and found that governments may have little control over when that switch happens. Their work shows how policymakers can incentivize manufacturers to ramp down production of gas cars while avoiding too much damage to the overall economy. Professor Holland recently spoke with Tyler Smith about the dangers of banning gasoline vehicles and how best to transition to electric cars.
Ep. 36: Demagoguery on the airwaves
22:55Right-wing radio has served as a megaphone for populist outrage in America. Talk-show hosts like Alex Jones and the late Rush Limbaugh have railed against cultural elites, promoted baseless claims of election fraud, stoked a backlash against immigrants, and questioned the effectiveness of masks and vaccinations amid the Covid-19 pandemic. How and to what extent do these charismatic radio personalities influence public opinion? In the American Economic Review, author Tianyi Wang goes back to the 1930s to help answer this question by examining the impact of the religious firebrand Father Charles Coughlin. Known as the “Father of Hate Radio,” Father Coughlin had a devoted following of tens of millions of listeners across the United States, who tuned in to hear him thunder against the evils of Communism, Wall Street bankers, and America’s involvement in World War II. Wang found that Coughlin’s program resonated profoundly with listeners, persuading more than a quarter of them to vote against Franklin Delano Roosevelt in the 1936 presidential election. Wang spoke with Chris Fleisher about Coughlin’s history as a populist media figure during the Great Depression, his influence over US public opinion, and the insights for today’s fragmented media. *Theme music in the podcast is from Podington Bear and the Father Charles Coughlin clip is from OldTimeRadioDownloads.com.