Working Paper: NBER ID: w31481
Authors: Pat Akey; Tania Babina; Greg Buchak; Anamaria Tenekedjieva
Abstract: We examine whether corporate money in politics benefits or hurts labor using the 2010 Supreme Court ruling Citizens United, which rendered bans on political election spending unconstitutional. In difference-in-difference analyses, affected states experience increases in both capital and labor income relative to unaffected states. We find evidence consistent with increased political spending spurring political competition and the adoption of pro-growth policies. These policies benefit a broader set of constituents as we find a broad-based increase in labor income. Affected states see increased political turnover and reduced regulatory burdens. The economic effects are stronger among ex-ante politically inactive and younger firms.
Keywords: money in politics; labor income; capital income; Citizens United; political competition; pro-growth policies
JEL Codes: D72; E25; G38; J30; P16
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Citizens United ruling (D72) | increased political spending (D72) |
| increased political spending (D72) | increased labor income (J39) |
| Citizens United ruling (D72) | increased labor income (J39) |
| increased political spending (D72) | greater political competition (P19) |
| greater political competition (P19) | pro-growth policies (O25) |
| pro-growth policies (O25) | increased labor income (J39) |
| Citizens United ruling (D72) | increased capital income (D33) |