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  3. American Economic Review
  4. October 2025
  5. Politics at Work

American Economic Review

ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)

Politics at Work

  • Emanuele Colonnelli
  • Valdemar Pinho Neto
  • Edoardo Teso
American Economic Review
vol. 115, no. 10, October 2025
(pp. 3367–3414)
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Abstract

We study how individual political views shape firm behavior and labor market outcomes using new microdata from Brazil. We first show that business owners are considerably more likely to employ copartisan workers. This phenomenon is in part driven by the overlapping of political and social networks. Multiple tests—surveys, event studies, analyses of wage premia and promotions within the firm, and a field experiment—further highlight how business owners' political preferences directly influence firms' employment decisions. A channel of political discrimination appears more relevant than one of political quid pro quo between firms and politicians.

Citation

Colonnelli, Emanuele, Valdemar Pinho Neto, and Edoardo Teso. 2025. "Politics at Work." American Economic Review 115 (10): 3367–3414. DOI: 10.1257/aer.20240151

Additional Materials

JEL Classification

  • C93 Field Experiments
  • D22 Firm Behavior: Empirical Analysis
  • D72 Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
  • J23 Labor Demand
  • M51 Personnel Economics: Firm Employment Decisions; Promotions
  • O17 Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
  • Z13 Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification