Economic Shocks, Opportunity Costs, and the Supply of Politicians
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| Format: | Preprint |
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2024
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| _version_ | 1866914200870191104 |
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| author | Barros, Laura Schmeißer, Aiko |
| author_facet | Barros, Laura Schmeißer, Aiko |
| contents | Adverse economic shocks are known to reshape voter behavior -- the demand side of politics. Much less is known about their consequences for the supply side: how such shocks affect who becomes a politician. This paper examines how job losses influence individuals' decisions to enter politics and the implications for political selection. Using administrative data linking political participation records to matched employer-employee data covering all formal workers in Brazil, and exploiting mass layoffs for causal identification, we find that job loss significantly increases the likelihood of joining a political party and running for local office. Layoff-induced candidates are positively selected on various competence measures, indicating that economic shocks can improve the quality of political entrants. The increase in candidacies is strongest among laid-off individuals with greater financial incentives from holding office and higher predicted income losses. A regression discontinuity design further shows that eligibility for unemployment benefits increases political entry. These results are consistent with a reduction in individuals' opportunity costs -- both in terms of reduced private-sector income and increased time resources -- facilitating greater political engagement. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2410_23705 |
| institution | arXiv |
| publishDate | 2024 |
| record_format | arxiv |
| spellingShingle | Economic Shocks, Opportunity Costs, and the Supply of Politicians Barros, Laura Schmeißer, Aiko General Economics Economics Adverse economic shocks are known to reshape voter behavior -- the demand side of politics. Much less is known about their consequences for the supply side: how such shocks affect who becomes a politician. This paper examines how job losses influence individuals' decisions to enter politics and the implications for political selection. Using administrative data linking political participation records to matched employer-employee data covering all formal workers in Brazil, and exploiting mass layoffs for causal identification, we find that job loss significantly increases the likelihood of joining a political party and running for local office. Layoff-induced candidates are positively selected on various competence measures, indicating that economic shocks can improve the quality of political entrants. The increase in candidacies is strongest among laid-off individuals with greater financial incentives from holding office and higher predicted income losses. A regression discontinuity design further shows that eligibility for unemployment benefits increases political entry. These results are consistent with a reduction in individuals' opportunity costs -- both in terms of reduced private-sector income and increased time resources -- facilitating greater political engagement. |
| title | Economic Shocks, Opportunity Costs, and the Supply of Politicians |
| topic | General Economics Economics |
| url | https://arxiv.org/abs/2410.23705 |