Topic: Job Loss and Political Entry

Speaker: Laura Barros (Georg-August-Universität Göttingen) and Aiko Schmeisser (University of Potsdam)

Time & venue:

Thursday, 12.15–1.30 p.m.

FU Berlin, Boltzmannstr. 16-20

room 202/ Kaminzimmer

Description: 

The supply of politicians affects the quality of democratic institutions. Yet, little is known about how economic trade-offs motivate individuals to enter political life. This paper investigates how experiencing a job loss affects individuals’ decision to join politics and studies the consequences of layoffs for the selection of politicians. Using administrative data on the universe of formal employees, party members, and local political candidates in Brazil, and relying on mass layoffs for causal identification, we show that job loss increases the probability of joining a political party and running for local office. Moreover, we document that layoff-induced candidates are positively selected in various competence measures, suggesting that economic shocks may improve the quality of politicians. Heterogeneity analyses reveal a more pronounced increase in candidacies for laid-off individuals with higher financial incentives from office holding and larger predicted income losses. In addition, we find that being eligible for unemployment benefits after job loss also increases party memberships and candidacies. These results are consistent with the reduction in private-sector opportunity costs and the increased time resources explaining the rise in political entry.