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Which Democracies Pay Higher Wages?

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  • James C. Rockey

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Abstract

This paper asks if and how constitutions affect labour market outcomes. This question is motivated by Rodrik (1999), who suggests that 'democracies pay higher wages' and Persson and Tabellini (2003) who provide evidence that constitutions impact on economic outcomes. An empirical analysis using treatment effect estimators and Bayesian Model Averaging provides robust causal evidence that presidential democracies are associated with lower wages, after controlling for other potential determinants such as the level of income per capita.

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File URL: http://www.efm.bris.ac.uk/economics/working_papers/pdffiles/dp07600.pdf
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Bibliographic Info

Paper provided by Department of Economics, University of Bristol, UK in its series Bristol Economics Discussion Papers with number 07/600.

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Length: 27 pages
Date of creation: Dec 2007
Date of revision:
Handle: RePEc:bri:uobdis:07/600

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Keywords: Democracy; Constitutions; Wages; Factor Shares; Bayesian Model Averaging;

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  1. Elhanan Helpman & Torsten Persson, 1998. "Lobbying and Legislative Bargaining," NBER Working Papers 6589, National Bureau of Economic Research, Inc.
  2. Malik, Adeel & Temple, Jonathan R.W., 2009. "The geography of output volatility," Journal of Development Economics, Elsevier, vol. 90(2), pages 163-178, November.
  3. Dani Rodrik, 1999. "Democracies Pay Higher Wages," The Quarterly Journal of Economics, MIT Press, vol. 114(3), pages 707-738, August.
  4. Jonathan R. W. Temple, 1998. "Robustness tests of the augmented Solow model," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 13(4), pages 361-375.
  5. Persson, Torsten & Roland, Gerard & Tabellini, Guido, 1997. "Separation of Powers and Political Accountability," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1163-1202, November.
  6. Alberto Alesina & William Easterly & Janina Matuszeski, 2006. "Artificial States," Harvard Institute of Economic Research Working Papers 2115, Harvard - Institute of Economic Research.
  7. Gernot Doppelhofer & Ronald I. Miller & Xavier Sala-i-Martin, 2000. "Determinants of Long-Term Growth: A Bayesian Averaging of Classical Estimates (BACE) Approach," NBER Working Papers 7750, National Bureau of Economic Research, Inc.
  8. Daron Acemoglu & Simon Johnson & James A. Robinson, 2000. "The Colonial Origins of Comparative Development: An Empirical Investigation," NBER Working Papers 7771, National Bureau of Economic Research, Inc.
  9. Uwe Dulleck & Paul Frijters, 2004. "Why the US and not Brazil? Old Elites and the Development of a Modern Economy," Vienna Economics Papers 0408, University of Vienna, Department of Economics.
  10. Daron Acemoglu, 2005. "Constitutions, Politics and Economics: A Review Essay on Persson and Tabellini's "The Economic Effect of Constitutions"," NBER Working Papers 11235, National Bureau of Economic Research, Inc.
  11. James Rockey, 2010. "Reconsidering the Fiscal Effects of Constitutions," Discussion Papers in Economics 10/16, Department of Economics, University of Leicester.
  12. Hoeting, Jennifer & Raftery, Adrian E. & Madigan, David, 1996. "A method for simultaneous variable selection and outlier identification in linear regression," Computational Statistics & Data Analysis, Elsevier, vol. 22(3), pages 251-270, July.
  13. Jaroslava Hlouskova & Martin Wagner, 2005. "The Performance of Panel Unit Root and Stationarity Tests: Results from a Large Scale Simulation Study," Economics Working Papers ECO2005/05, European University Institute.
  14. Gallup, J.L. & Sachs, J.D. & Mullinger, A., 1999. "Geography and Economic Development," Papers 1, Chicago - Graduate School of Business.
  15. Lee, Myoung-jae, 2005. "Micro-Econometrics for Policy, Program and Treatment Effects," OUP Catalogue, Oxford University Press, number 9780199267699, September.
  16. John Luke Gallup & Jeffrey D. Sachs & Andrew Mellinger, 1999. "Geography and Economic Development," CID Working Papers 1, Center for International Development at Harvard University.
  17. Douglas Gollin, 2001. "Getting Income Shares Right," Department of Economics Working Papers 2001-11, Department of Economics, Williams College.
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