Do Unions Shape Political Ideologies at Work? (with Johannes Matzat)

Latest version, CESifo Working Paper No. 10301 (2023)

Abstract: Labor unions influence economic outcomes not only through bargaining with employers over work contracts but also via political activities that can profoundly shape political systems. In unionized workplaces, they may mobilize and change the ideological positions of both unionizing workers and their non-unionizing management. In this paper, we analyze the workplace-level impact of unionization on workers' and managers' political campaign contributions in the United States from 1980 to 2016. To do so, we link establishment-level union election data with transaction-level campaign contributions to federal and local candidates. Using a difference-in-differences design, validated through regression discontinuity tests and a novel instrumental variable approach, we find that unionization leads to a leftward shift of campaign contributions. Unionization increases the support for Democrats relative to Republicans not only among workers but also among managers, suggesting that it fosters political alignment between the two groups. Our findings are not driven by compositional changes of the workforce and are stronger in establishments where, after union certification, the employer and union agree on a collective bargaining agreement. 

Presentations: [2024] Verein für Socialpolitik (Berlin), IZA Summer School (Bonn), Midwest Political Science Association (Chicago), Harvard Political Economy Workshop (Cambridge), Rockwool Foundation (Berlin), BSoE Applied Micro & Behavioral Economics Workshop (Berlin), BeNA Winter Workshop (Berlin), [2023] EALE Conference (Prague), EEA-ESEM Congress (Barcelona), ESPE Annual Conference (Belgrade), Society for Institutional & Organizational Economics (Frankfurt), IAAEU Colloquium on Economics (Trier), Research Seminar in Economics (Potsdam), [2022] ifo Workshop on Political Economy (Dresden), Development Economics Seminar (Göttingen), GlaD-DENeB Workshop (Göttingen), Beyond Basic Questions Workshop (Bern), BSoE Summer Workshop (Berlin), FU Research Seminar for Applied Microeconomics (Berlin)

Awards: 2nd place of the European Public Choice Society Wicksell Prize 2023 

Coverd in The Hammer by Hamilton Nolan 

Racial Peer Effects at Work: Evidence from Worker Deaths in Brazil (with Katharina Fietz)

World Bank Policy Research Working Paper No. 10899

Abstract: This paper studies the impact of working with same-race coworkers on individuals’ retention at firms. Using administrative employer-employee data from Brazil, the paper exploits unexpected deaths of workers from different racial groups as exogenous shocks to peer group composition. The findings show that a decrease in the non-white share of coworkers reduces the retention of non-white workers but does not affect the retention of white workers. The effects are driven by non-whites quitting and moving to new jobs with more peers of the same race than in their old jobs. The findings highlight how peer dynamics can contribute to racial segregation across workplaces.

Presentations: [2024] EEA-ESEM Congress (Rotterdam), ICDE (Aix-en-Provence), ESPE Annual Conference (Rotterdam), Economics PhD Conference (Warwick), GDE Conference (Hanover), RIDGE Workshop on Public Economics (Santiago de Chile), EUDN PhD Workshop (Paris), Doctorissimes PhD Conference (Paris), BeNA 20 Year Conference (Berlin), RGS Doctoral Conference (Essen), ROCKWOOL Foundation Graduate Student Seminar (Berlin), DENeB Workshop (Berlin)

The Accuracy of Job Seekers' Wage Expectations (with Marco Caliendo, Robert Mahlstedt, and Sophie Wagner)

IZA Discussion Paper No. 17198

Abstract: We study the accuracy of job seekers’ wage expectations by comparing subjective beliefs to objective benchmarks using linked administrative and survey data. Our findings show that especially job seekers with low objective earnings potential and those predicted to face a penalty compared to their pre-unemployment wage display overly optimistic wage expectations. Moreover, wage optimism is amplified by increased job search incentives and job seekers with overoptimistic wage expectations tend to overestimate their reemployment chances. We discuss the labor market implications of wage optimism, as well as the role of information frictions and motivated beliefs as sources of overoptimism.

Presentations: [2024] SOLE Annual Meeting (Portland), [2023] EALE Conference (Prague), ESPE Annual Conference (Belgrade), [2022] BeNA Winter Workshop (Berlin), Verein für Socialpolitik (Basel)

Job Loss and Political Entry (with Laura Barros)

arXiv:2410.23705

Abstract: The supply of politicians affects the quality of democratic institutions. Yet little is known about the economic motivations that drive individuals into politics. This paper examines how experiencing a job loss affects individuals' decisions to enter political life and explores its implications for political selection. Using highly granular administrative data linking individual records of political participation with comprehensive employer-employee data for all formal workers in Brazil, and leveraging 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, suggesting that economic shocks may improve the quality of political entrants. Further, we observe that the increase in candidacies is more pronounced among laid-off individuals with greater financial incentives from office holding and higher predicted income losses. Finally, using a regression discontinuity design, we find that eligibility for unemployment benefits increases the likelihood of becoming a party member and running for local office. These results are consistent with the reduction in private-sector opportunity costs and the increased time resources explaining the rise in political entry.  

Presentations: [2024] EJPE-CEPR Political Economy Conference (Naples), Verein für Socialpolitik (Berlin), RIDGE/LACEA Workshop on Political Economy (Santiago de Chile), Harvard Political Economy Graduate Workshop (Cambridge), Applied Young Economist Webinar (Online), [2023] BeNA Winter Workshop (Berlin), Development Economics Seminar (Göttingen), Iberoamerican Brown-Bag Seminar (Göttingen), Göttingen-Braunschweig Internal Workshop (Göttingen)