Politics at Work

Research Question

Do individual political views shape firm behavior and labor market outcomes in the private sector? Specifically, do business owners sort copartisan workers into their firms, and does employers’ political discrimination drive this sorting?

Data and Setting

The paper studies the complete Brazilian formal labor market over 2002–2019, assembling a novel longitudinal worker-firm-owner-party matched dataset from three administrative sources: (1) RAIS (Relação Anual de Informações Sociais), the universe of formal-sector workers (87 million unique workers, 7.6 million unique firms); (2) the Receita Federal do Brazil (RFB) and Cadastro Nacional de Empresas (CNE), containing business ownership structures for all registered firms; and (3) the Tribunal Superior Eleitoral (TSE) registry of all party members (19.3 million individuals) over 2002–2019. Matching these sources yields political affiliation for 11.4% of all private-sector owners and 7.8% of all private-sector workers in the sample. Party affiliation in Brazil requires an active registration step and is interpreted as a signal of strong and visible political views, distinguishing affiliated from unaffiliated individuals who likely hold milder views. The 35 parties in the sample are highly fragmented; the top 7 account for nearly 70% of all party members.

State Capacity as an Organizational Problem

Mastrorocco and Teso study how the internal organization of a state evolves during national development, framing state capacity as an organizational — specifically a principal-agent — problem. Using a new micro-database covering the U.S. federal bureaucracy from 1817 to 1905, they ask: once rulers have incentives to build a state apparatus, how do they organize it to perform its functions across a vast territory, and what drives transitions between organizational forms?

Edoardo Teso | Macro Paper Warehouse

Politics at Work

State Capacity as an Organizational Problem