Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/119447
Authors: 
Neumeier, Florian
Year of Publication: 
2015
Series/Report no.: 
Joint Discussion Paper Series in Economics 19-2015
Abstract: 
This paper empirically evaluates the economic performance of U.S. state governors who came to the position from a business background (CEO governors), focusing on the growth rate of real personal income per capita, unemployment rate, and income inequality. Methodologically, we apply a matching method to account for the endogeneity of political selection. Using entropy balancing, we identify credible counterfactuals for CEO governors, that is, governors without a business background who took office under similar economic and fiscal situations. We find, first, that businesspeople tend to take office in times of economic and fiscal strain. Second, the tenures of CEO governors are associated with a 0.6 percentage points higher annual income growth rate and a 0.6 percentage points lower unemployment rate than are the tenures of non-CEO governors. Also, state-level income inequality decreases when CEO governors hold office, indicating that low-income households benefit from the economic upswing. Third, the positive effect of having a CEO governor increases with time in office. Fourth, Republican CEO governors perform slightly better than their Democratic colleagues.
Subjects: 
U.S. Governors
U.S. politics
U.S. states
economic growth
unemployment
income inequality
businessmen
CEO
entropy balancing
JEL: 
C21
E24
E60
O47
Document Type: 
Working Paper

Files in This Item:
File
Size
224.44 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.