Politics at Work

89 Pages Posted: 29 Jun 2022

Multiple version iconThere are 3 versions of this paper

Date Written: June 27, 2022

Abstract

We study how individual political views shape firm behavior and labor market outcomes. Using new micro-data on the political affiliation of business owners and private-sector workers in Brazil over the 2002–2019 period, we first document the presence of political assortative matching: business owners are significantly more likely to employ copartisan workers. Political assortative matching is larger in magnitude than assortative matching along gender and racial lines. We then provide three sets of results consistent with the presence of employers’ political discrimination. First, several patterns in the micro-data and an event study are consistent with a discrimination channel. Second, we conduct an incentivized resume rating field experiment showing that owners have a direct preference for copartisan workers opposed to workers from a different party. Third, we conduct representative large- scale surveys of owners and workers revealing that labor market participants view employers’ discrimination as the leading explanation behind our findings. We conclude by presenting evidence suggesting that political discrimination in the workplace has additional real consequences: copartisan workers are paid more and are promoted faster within the firm, despite being less qualified; firms displaying stronger degrees of political assortative matching grow less than comparable firms.

JEL Classification: D22,D72,D73,G0,G3,G4,J0,J15,J2,J3,J7,O0,O1

Suggested Citation

Colonnelli, Emanuele and Pinho Neto, Valdemar and Teso, Edoardo, Politics at Work (June 27, 2022). University of Chicago, Becker Friedman Institute for Economics Working Paper No. 2022-86, Available at SSRN: https://ssrn.com/abstract=4149761 or http://dx.doi.org/10.2139/ssrn.4149761

Emanuele Colonnelli (Contact Author)

University of Chicago - Booth School of Business ( email )

HOME PAGE: http://emanuelecolonnelli.com

Valdemar Pinho Neto

Brazilian School of Economics and Finance ( email )

RJ 22250
Rio de Janeiro
Brazil

Edoardo Teso

Northwestern University - Department of Managerial Economics and Decision Sciences (MEDS) ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

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