Politics in the Family: Nepotism and the Hiring Decisions of Italian Firms

Stefano Gagliarducci and Marco Manacorda ()

No 9841, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: In this paper we investigate the effect of family connections to politicians on individuals' labor market outcomes. We combine data for Italy over almost three decades from longitudinal social security records on a random sample of around 1 million private sector employees with the universe of around 500,000 individuals ever holding political office, and we exploit information available in both datasets on a substring of each individual's last name and municipality of birth in order to identify family ties. Using a diff-in-diff analysis that follows individuals as their family members enter and leave office, and correcting for the measurement error induced by our fuzzy matching method, we estimate that the monetary return to having a politician in the family is around 3.5 percent worth of private sector earnings and that each politician is able to extract rents for his family worth between one fourth and one full private sector job per year. The effect of nepotism is long lasting, extending well beyond the period in office. Consistent with the view that this is a technology of rent appropriation on the part of politicians, the effect increases with politicians' clout and with the resources available in the administration where they serve.

Keywords: politics; family connections; Nepotism; rent appropriation (search for similar items in EconPapers)
JEL-codes: D72 D73 H72 J24 J30 M51 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2016-03
New Economics Papers: this item is included in nep-eur, nep-lma and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

Published - published in: American Economic Journal: Applied Economics, 2020, 12 (2), 67 - 95

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https://docs.iza.org/dp9841.pdf (application/pdf)

Related works:
Journal Article: Politics in the Family: Nepotism and the Hiring Decisions of Italian Firms (2020)
Working Paper: Politics in the family: nepotism and the hiring decisions of Italian firms (2016)
Working Paper: Politics in the Family Nepotism and the Hiring Decisions of Italian Firms (2016)
Working Paper: Politics in the family: Nepotism and the hiring decisionsof Italian firms (2016)
Working Paper: Politics in the Family. Nepotism and the Hiring Decisions of Italian Firms (2016)
Working Paper: Politics in the Family. Nepotism and the Hiring Decisions of Italian Firms (2016)
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