Political parties and labor-market outcomes: Evidence from US states
American Economic Journal: Applied Economics , Volume 7 - Issue 4 p. 198- 220
This paper estimates the causal impact of the party allegiance (Republican or Democratic) of US governors on labor-market outcomes. I match gubernatorial elections with March Current Population Survey (CPS) data for income years 1977 to 2008. Using a regression discontinuity design, I find that Democratic governors cause an increase in the annual hours worked by blacks relative to whites, which leads to a reduction in the racial earnings gap between black and white workers. The results are consistent and robust to using a wide range of models, controls, and specifications. (JEL D72, J15, J22, J31, R23).