Working Paper: CEPR ID: DP17408
Authors: Emanuele Colonnelli; Valdemar Pinho Neto; Edoardo Teso
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.
Keywords: partisanship; discrimination; labor markets; firms
JEL Codes: No JEL codes provided
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| hiring preferences (M51) | political assortative matching (C78) |
| Political affiliation (D72) | political discrimination (J71) |
| political discrimination (J71) | economic consequences (F69) |
| political discrimination (J71) | lower growth in firms (D25) |
| Political affiliation (D72) | matching stronger in smaller firms (L25) |
| Political affiliation (D72) | matching stronger in higher-level positions (C78) |
| Political affiliation (D72) | hiring preferences (M51) |
| Political affiliation (D72) | hiring patterns changes (J63) |
| Political affiliation (D72) | copartisan resume rating (D79) |