Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/141600
Authors: 
Gagliarducci, Stefano
Manacorda, Marco
Year of Publication: 
2016
Series/Report no.: 
IZA Discussion Papers 9841
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.
Subjects: 
Nepotism
family connections
politics
rent appropriation
JEL: 
D72
D73
H72
J24
J30
M51
Document Type: 
Working Paper

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