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每週研討會

Farewell President! Political Favoritism, Economic Inequality, and Political Polarization

  • 日期 2019-10-29 (週二)
  • 時間 02:30 PM
  • 地點 Conference Room B110
  • 主持人 Professor Tzu-Ting Yang
  • 演講者 Professor Hui-Pei Cheng (鄭輝培)
  • 演講者簡介 Professor Cheng received his Ph.D. in Economics from University of Warwick in 2018. He is currently an Assistant Professor at Soochow University. His research fields are Labour Economics, Political Economics, Crime Econmics, and Finance Economics.
  • 摘要 This paper examines the effect of political favoritism on economic inequality in the short run and political polarization in the long run. We exploit the sudden death of an authoritarian leader - President Chiang Ching-Kuo of Taiwan - in 1988 to generate plausibly exogenous variation in partiality. We find that Chiang's nationalist regime conducted political favoritism broadly toward political immigrants via cronyism (allocating public sector positions) and also differentially toward specific subgroups of political immigrants via wage discrimination (offering higher payroll to these subgroups within the public sector). Favoritism led to a 4.7 percent immigrant payroll premium that accounted for around half of the immigrant-native payroll gap at the time. This in turn propelled overall income inequality by 3.2 percent. Moreover, political favoritism breeds political polarization in the long run. Compared with natives, immigrants who were exposed to favoritism tend to adopt political positions that are aligned with the nationalist party today: they are more likely to support unification with China, and are more inclined to trust the mainland Chinese government and its citizens.
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