The Economy and the American Presidency in a Polarized Era: Changes to Income and Unemployment by Class, Race, and Gender

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For decades, political scientists have debated, with little consensus, whether Democratic and Republican presidents have contrasting macroeconomic records. While some scholars have argued that presidents can (and do) target economic benefits to constituents, existing research on party differences in macroeconomic politics has assumed that the two major parties have constituencies distinguished by class and that each party managed the macroeconomy to benefit these class-based constituencies. However, political and economic conditions have changed over the past thirty years. Scholars have been concerned about the effects of increasing political polarization, which has caused unusually contentious and slow-paced policymaking. High debt levels have made major budgetary changes more difficult, and monetary policy has been checked by the zero lower bound. In light of these new political and economic challenges, this dissertation utilizes a unique dataset to examine presidential administrations from 1970 to 2014. Using this data, this project seeks to answer several key questions: Do modern presidents of opposing parties have contrasting macroeconomic records? In light of changing political and economic conditions, have these differences grown or decreased from the differences observed in the past? Finally, do modern presidents reflect the identity politics of the polarized, modern era by focusing not only on class constituencies, but on race and gender constituencies as well?

Some of the findings are predictable, but others are surprising. In terms of the macroeconomy, Democratic presidents demonstrate economic records superior to their Republican counterparts. However, the party of the president rarely has any meaningful impact on income growth for specific class, race, and gender groups. Even so, the party of the president does have a consistently meaningful effect on unemployment rates. On average, Democratic presidents have greater impacts than Republicans on the overall unemployment rate and the unemployment rates of some of their constituent groups: the working class, and racial minorities. Moreover, evidence suggests that other political factors sometimes matter – both divided government and an election year variable capturing the Political Business Cycle have statistical relevance, especially in unemployment models. Finally, this study finds little statistical evidence that polarization is having a meaningful impact on presidential economic policymaking.