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Which Democracies Pay Higher Wages?

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  • James C. Rockey

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.

Suggested Citation

  • James C. Rockey, 2007. "Which Democracies Pay Higher Wages?," Bristol Economics Discussion Papers 07/600, School of Economics, University of Bristol, UK.
    • Handle: RePEc:bri:uobdis:07/600
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    References listed on IDEAS

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    2. Rockey, James, 2012. "Reconsidering the fiscal effects of constitutions," European Journal of Political Economy, Elsevier, vol. 28(3), pages 313-323.

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    Keywords

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    JEL classification:

    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General

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