Politics At Work
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.
We thank Oriana Bandiera, Marianne Bertrand, Georgy Egorov, Dimas Fazio, Claudio Ferraz, Ray Fisman, Thomas Fujiwara, Luigi Guiso, Mitchell Hoffman, Elisabeth Kempf, Davide Malacrino, Ben McCartney, Chris Moser, Phong Ngo, Nancy Qian, Jorg Spenkuch, Francesco Trebbi, Miguel Urquiola, Lugi Zingales, and seminar participants at UChicago, UBC, USC, EIEF, CEMFI, Stockholm University, LACEA 2021, AEA 2021, PACDEV 2021, RIDGE 2022, the Firms, Markets and Development webinar series, the Junior Entrepreneurial Finance and Innovation group, the 2020 Political Economy in the Chicago Area Conference for helpful comments and suggestions. Thiago Alckmin, Gabriel Lobato, and Nicolas Pinto provided excellent research assistance. We are grateful to The University of Chicago Booth School of Business, the Fama Miller Center, the Becker Friedman Institute, and the Liew Family Junior Faculty Fellowship for financial support. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.