Economic Shocks, Opportunity Costs, and the Supply of Politicians (with Aiko Schmeißer)
Previously circulated as Job Loss and Political Entry.
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.
Barros, Laura and Manuel Santos Silva (2025). Economic shocks, gender, and populism: Evidence from Brazil. Journal of Development Economics, 174: 103412.
Barros, Laura and Manuel Santos Silva (2025). Between sticky floors and glass ceilings: Trade liberalization and wage inequality by gender and race in Brazil. Economic Development and Cultural Change, 73(4): 1685-1719.
Barros, Laura and Inmaculada Martínez-Zarzoso (2022). Systematic literature review on trade liberalization and sustainable development. Sustainable Production and Consumption, 33: 921–931.
Barros, Laura and Ute Rink (2021) Spending or saving? Female empowerment and financial decisions in a matrilineal society, World Development, 141: 105342
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