Applied Microeconomics Seminar Series No. 4 – Dr Claudio Labanca (Monash University)

Campaign Connections

This paper explores the labor market returns to working for a victorious electoral campaign. Growing evidence suggests that politicians reward those who contribute capital to their campaigns. Yet, little is known about the returns to those who contribute labor. Detailed administrative data in Brazil offer a unique opportunity to track the evolution of earnings and employment of campaign workers before, during, and after majoritarian elections spanning nearly 20 years. Combining difference-in-differences with a close-election regression discontinuity design, we identify large returns to working for a winning campaign. Dedicated campaign staff see large and persistent earnings gains, while contractors, at arms length from the campaign, reap smaller albeit still sizable returns. For many workers, campaign connections provide a durable pathway into the formal sector. While campaign donors find large returns through public employment, campaign labor find such returns in both the public and the private sector. Overall, our findings are consistent with a patronage-based mechanism, but we cannot rule out an experience-based mechanism, as those with weak formal sector experience build up a reputation and networks that prove useful in subsequent search.


Start Date
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Fred Gruen Economics Seminar Room (H.W. Arndt Bldg 25A)
Dr Claudio Labanca (Monash University)