Political Parties Do Matter in US Cities … for Their Unfunded Pensions

This paper studies public sector pension obligations, the biggest fiscal challenge currently facing many US cities. Employing a regression discontinuity design around close elections, benefit payments out of city’s pensions are shown to grow faster under Democratic party mayors, while contributions into do not. Previous research showed that parties not matter for wide range cities’ expenditures and explained this with voters imposing discipline. replicates previous results but shows can shrouded expenditure types pay attention to, especially if they well-organized interest groups. (JEL D72, H72, H75, J32, J45)