Center for Economic Policy Analysis at UC San Diego:
Initiative on State and Local Government Performance

Research Affiliates

About the Initiative on State and Local Government Performance

The performance of state and local governments is of critical importance to the U.S. economy. State and local governments play central roles in delivering education, health care, transportation, public safety, and other public services. They also administer many components of the social safety net. Remarkably, they employ roughly one in seven U.S. workers and account for around one fifth of GDP.

The centrality of state and local governments to the U.S. economy points to the need for research that helps us gauge their performance and, in so doing, to better inform policy and the design of state and local government institutions. To this end, issues considered by affiliated faculty include:

• Understanding how the finances of state governments, municipal governments, and school districts respond to incentives created by the federal government.
• Understanding what factors shape how state governments, municipal governments, and school districts use federal grants.
• Assessing what forces shape outcomes in the labor markets for public sector workers.
• Assessing how to improve the equity and efficiency of the services provided by state and local governments.
• Assessing the role of machine learning and artificial intelligence in the administration of criminal justice systems, school systems, and other government agencies. 
• Understanding the roles played by state, city, and county governments in responding to public health crises like the COVID-19 pandemic.
• Understanding what functions of government are best handled at the local, state, or federal levels.

Faculty Research Spotlights

Multiple affiliated faculty members have important lines of research that relate to the performance of public school districts. Julian Betts has had substantial influence on education policy through his long-standing role as Executive Director of the San Diego Education Research Alliance (SanDERA). Julie Cullen has published multiple papers on topics related to school accountability. These include research on the evaluation and selection of high school principals in the Journal of Human Resources (joint with Eric A. Hanushek, Gregory Phelan, and Steven G. Rivkin), on the effects of rigorous teacher evaluations in Education Finance and Policy (joint with Cory Koedel and Eric Parsons), and on policy options for improving struggling high schools in the Journal of Economic Perspectives (joint with Steven D. Levitt, Erin Robertson, and Sally Sadoff). Julie’s work on the effects of the Texas 10 Percent college admission program, a policy designed to equalize access to post-secondary education across localities, has been published in the Journal of Public Economics (joint with Mark C. Long and Randall Reback). Clemence Idoux’s ongoing research on school choice and on the effects of efforts to integrate public schools districts has been translated into a set of research briefs.

David Arnold has published research on the labor market effects of privatizing state-owned enterprises in the American Economic Journal: Applied Economics. He has written two papers on racial discrimination in bail decisions that have been published in the American Economic Review (joint with Will Dobbie and Peter Hull) and the Quarterly Journal of Economics (joint with Will Dobbie and Crystal Yang). He has additional research developing methods for the measurement of racial biases in algorithms deployed in criminal justice systems.

Jeffrey Clemens has conducted a body of research on the role and performance of state and local governments in the U.S. federal system. He has published research in American Economic Journal: Economic Policy on the multiplier effects associated with state government spending (joint with Stephen Miran), and has revisited this theme in the context of the COVID-19 pandemic in a recent NBER working paper (joint with Philip Hoxie and Stan Veuger). He has published research in the Journal of Public Economics on the rise of the role of state governments within the U.S. federal system (joint with Katherine Baicker and Monica Singhal). In the context of the COVID-19 pandemic, his work contributed to methods for forecasting state revenue gaps at the pandemic’s onset (joint with Stan Veuger and published in National Tax Journal). His research subsequently studied the manner in which federal aid was distributed across states (joint with Stan Veuger and published in the Journal of Public Economics), and of the effects of that federal aid on testing and vaccination campaigns (joint with Philip Hoxie, John Kearns, and Stan Veuger and published in the Journal of Public Economics). Ongoing work in this space considers the effects of federal aid on population health during the pandemic (a working paper joint with Anwita Mahajan), on state government budgets (a working paper joint with Oliver Giesecke, Joshua Rauh, and Stan Veuger), and on the political fortunes of incumbent politicians during their subsequent elections (a working paper joint with Julia Payson and Stan Veuger). He is currently co-organizing a conference through the National Bureau of Economic Research to advance research on this set of themes.

Julie Cullen has organized research conferences on the economics of fiscal federalism. Her research on this theme includes a study published in the Journal of Public Economics on income redistribution in federal systems (joint with Roger Gordon). She has also published research on the effects of state incentives on school districts’ classification of students with disabilities in the Journal of Public Economics.

Policy Outreach and Partnerships with State and Local Government Stakeholders

• Prashant Bharadwaj and David Arnold are working in partnership with the state of California to design algorithms to improve efforts to enforce the appropriate payment of child support. 

• Julian Betts continues his policy-oriented work as Executive Director of SanDERA.

• Jeffrey Clemens has written for broad audiences on minimum wages, federal aid to state and local governments during the COVID-19 pandemic, and other policy-relevant topics.  

• Judd Boomhower contributed to a 2020 study of the cost of wildfires in California as a Member of the Steering Committee for the California Council on Science and Technology. He has also given testimony before the California State Assembly Natural Resources Committee on idle and orphan oil and gas wells. He has also written for a broad audience on the timely topic of how wildfire risk is impacting home insurance markets.

Research by Current Students and Graduate Program Alumni

• Philip Hoxie has published research in the Journal of Public Economics (joint with Jeffrey Clemens, John Kearns, and Stan Veuger) on the effects of federal aid to state and local governments on the rollout of COVID-19 testing and vaccination campaigns. He has also published research in the Journal of Public Economics on the rising extent to which high housing costs discourage the mobility of all but the most educated households to high productivity regions.

• David Coyne has published research on the responses of local fiscal outcomes to the federal deductibility of state and local taxes in National Tax Journal.

• Rebecca Fraenkel has published research in Labour Economics on the effects of local labor market conditions on the market for teachers.

• Nobuhiko Nakazawa has published research in The Journal of Law, Economics, and Organization on the effects of bureaucratic mentorship of local public officials on fiscal discipline.

• Dodge Cahan has published research in the European Economic Review analyzing the extent to which governors manipulate public sector employment to enhance their electoral prospects.

• Yanjun (Penny) Liao has published research in Economics of Disasters and Climate Change (joint with Qing Miao, Michael Abrigo and Yilin Hou) on the effects of hurricanes and floods on local government finances.

• Robert McKay has published research in Public Budgeting & Finance on the impact of fiscal stress on local government fiscal structures.

Ongoing Projects

• Clemence Idoux has ongoing research on the effects of efforts to integrate New York City’s public schools and on the effects of selective school admissions reforms.

• Jeffrey Clemens continues his research on how state and local governments deployed the $1 trillion in aid they received from the federal government during the COVID-19 pandemic. He is also initiating a project to understand how local governments are accommodating the declines in infrastructure and public service needs that result from declining populations, and how their choices impact the ongoing cost of delivering services.

• Julie Cullen has ongoing research on the causes and consequences of student tracking.

• David Arnold continues to research the measurement of racial bias and the design of algorithms deployed by government agencies.