Research Seminar Series on “Global Challenges” -Silvia Vannutelli (Northwestern University), 22nd June 2023 at 12:15 p.m. (CET)

Research Seminar Series on “Global Challenges”

Silvia Vannutelli (Northwestern University) on “The political economy of stimulus transfers“, jointly organised by the Centro Studi Luca d’Agliano, BAFFI CAREFIN and the Department of Economics, Management and Quantitative Methods (University of Milan) in collaboration with the Dipartimento di Economia, Metodi Quantitativi e Strategie di Impresa (Università Milano Bicocca) and the Dipartimento di Ingegneria Gestionale (Politecnico di Milano) and the Department of Economics (University of Insubria).

The seminar will be held on Thursday, 22nd June 2023 at 12:15 p.m. (CET) in a hybrid format:

– DEMM seminar room, Via Conservatorio 7, 2nd floor.

– Via Zoom. Please register by email to


Stimulus payments are a frequent tool used by governments during economic downturns. While transfers should be targeted towards individuals with the highest marginal propensity to consume, the design of benefits might also be driven by political economy considerations. This paper investigates the electoral effects of stimulus payments. I leverage quasi-exogenous local variation in exposure to a large stimulus tax credit introduced in Italy in 2014 by the Democratic Party and targeted towards the median earner. I document that a 1 percentage point increase in the share of recipients leads to a 0.18 percentage points increase in the Democratic Party’s vote share in subsequent elections. The effect persists up to 5 years after the policy introduction, even after the Democratic Party government left office. I also find evidence of significant ex-post punishment of the incumbent among excluded recipients. Results are confirmed in a panel survey of voters interviewed before and after the program introduction, suggesting a key role of the transfer in shifting attitudes towards the incumbent.