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Democracies Pay Higher Wages

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  • Dani Rodrik

Abstract

Controlling for labor productivity, income levels, and other possible determinants, there is a robust and statistically significant association between the extent of democracy and the level of manufacturing wages in a country. The association exists both across countries and over time within countries. The coefficient estimates suggest that nonnegligible wage improvements result from the enhancement of democratic institutions: average wages in a country like Mexico would be expected to increase by 10 to 40 percent if Mexico were to attain a level of democracy comparable to that prevailing in the United States. Political competition and participation seem to be the driving force behind the result. © 2000 the President and Fellows of Harvard College and the Massachusetts Institute of Technology

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Bibliographic Info

Article provided by MIT Press in its journal The Quarterly Journal of Economics.

Volume (Year): 114 (1999)
Issue (Month): 3 (August)
Pages: 707-738

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Handle: RePEc:tpr:qjecon:v:114:y:1999:i:3:p:707-738

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Web page: http://mitpress.mit.edu/journals/

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  1. Robert J. Barro, 1998. "Determinants of Economic Growth: A Cross-Country Empirical Study," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262522543.
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  1. Regionalizare, guverne, fericire individuala
    by hymerion in dan popa on 2011-06-27 09:09:43
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