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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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References

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  1. Adeel Malik & Jonathan R W Temple, 2005. "The Geography of Output Volatility," CSAE Working Paper Series 2005-07, Centre for the Study of African Economies, University of Oxford.
  2. Douglas Gollin, 2001. "Getting Income Shares Right," Department of Economics Working Papers 2001-11, Department of Economics, Williams College.
  3. John Luke Gallup & Jeffrey D. Sachs & Andrew Mellinger, 1999. "Geography and Economic Development," CID Working Papers 1, Center for International Development at Harvard University.
  4. Uwe Dulleck & Paul Frijters, 2004. "Why the US and not Brazil? Old Elites and the Development of a Modern Economy," School of Economics and Finance Discussion Papers and Working Papers Series 186b, School of Economics and Finance, Queensland University of Technology.
  5. Jaroslava Hlouskova & Martin Wagner, 2006. "The Performance of Panel Unit Root and Stationarity Tests: Results from a Large Scale Simulation Study," Econometric Reviews, Taylor & Francis Journals, vol. 25(1), pages 85-116.
  6. Elhanan Helpman & Torsten Persson, 1998. "Lobbying and Legistlative Bargaining," Harvard Institute of Economic Research Working Papers 1837, Harvard - Institute of Economic Research.
  7. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
  8. Torsten Persson & Gerard Roland & Guido Tabellini, . "Separation of Powers and Political Accountability," Working Papers 100, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  9. Lee, Myoung-jae, 2005. "Micro-Econometrics for Policy, Program and Treatment Effects," OUP Catalogue, Oxford University Press, number 9780199267699.
  10. Rodrik, Dani, 1998. "Democracies Pay Higher Wages," CEPR Discussion Papers 1776, C.E.P.R. Discussion Papers.
  11. 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.
  12. 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.
  13. Alberto Alesina & William Easterly & Janina Matuszeski, 2006. "Artificial States," Harvard Institute of Economic Research Working Papers 2115, Harvard - Institute of Economic Research.
  14. 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.
  15. 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.
  16. Gallup, J.L. & Sachs, J.D. & Mullinger, A., 1999. "Geography and Economic Development," Papers 1, Chicago - Graduate School of Business.
  17. James Rockey, 2010. "Reconsidering the Fiscal Effects of Constitutions," Discussion Papers in Economics 10/16, Department of Economics, University of Leicester.
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