Abstract: I use a dynamic spatial Durbin model using a panel of the contiguous United States from 1956 to 2013 to investigate whether federal highway grants impact income inequality. I show federal highway grants reduce the growth rate of state-level pre-tax pre-transfer Gini coefficients. Grants reduce the growth rate of income inequality both in the recipient state as well as neighboring states. After accounting for spillovers, doubling highway grants reduce the growth rate of the Gini coefficient by 1.76 percentage points, which translates to a .009 average reduction in the level of the Gini coefficient. I find that federal highway grants reduce incoming inequality primarily by raising income of the lower three quintiles of the income distribution, while leaving the upper two essentially unaffected; the elasticity of income to grants is approximately five times larger for the second and third quintile compared to the fourth and fifth income quintile. Despite not being an explicitly re-distributive policy, my estimates imply the equalizing effects of highway grants are approximately a tenth as large as re-distributive programs such as the EITC. Using micro level CPS data, I show that heterogeneity in educational attainment and industry of work help explain plausible mechanisms driving the results. Income statistically rise in response to highway grants for low-skilled workers and workers in low-skilled industries respectively, however I find no evidence of an effect on income for high-skilled workers and workers in high-skilled industries. Using military spending as a falsification test, I show the results are not explainable by general increases in government spending.
Hey, What's The Hold Up?: Implementation Lags in Infrastructure Spending (work in progress)
Abstract: I explore the effects of implementation lags on the short and long run effects of public infrastructure investment. Public infrastructure spending was an important component of the American Recovery and Reinvestment Act (ARRA) on the grounds that it is a relatively efficient source of government expenditures. However, economists argue lags in the implementation of public infrastructure make it an ineffective countercyclical policy tool in the short run. I construct measures of implementation lags using project level data from the American Recovery and Reinvestment Act (ARRA) and weekly updates from the Federal Highway Administration. I present stylized facts on the magnitude of implementation lags that occurred between the signing of the ARRA to the completion of projects. I show there is heterogeneity by type of project not only during the construction phase, but the period before construction occurs as well. I exploit this variation to demonstrate the effect of implementation lags on the short and long run effects of highway grants.
Endogenous Red Tape: Is Red Tape a Policy Tool? (work in progress)
Abstract: I explore the degree to which the fiscal authorities can endogenously reduce administrative lag times over the business cycle. Using restricted public access data on federal projects financed through the Department of Transportation from the period spanning between 1946 and 2017, I show how administrative lags vary over the business cycle.