Economics Research Seminar: Family Connections, Nepotism, and Political Bargaining

About this seminar

This seminar presents new evidence on how nepotism shapes public employment and political bargaining in local government.

Speaker

Professor Paolo Pinotti
Dean of Faculty and Professor of Economics, Department of Social and Political Sciences
Endowed Chair in the Economic Analysis of Crime

Abstract

This paper studies nepotism as both a form of favoritism and a tool for political bargaining. We focus on Brazilian municipalities, leveraging rich population data that link family ties, electoral candidates, and employment records. Using a regression discontinuity design based on close elections, we show that the relatives of narrowly elected mayors and councilors experience sizable labor market premiums. Relatives of mayors are 16 percent more likely to secure public employment relative to the control group mean, while relatives of councilors are 9 percent more likely. These effects are concentrated in public jobs, fade once the political term ends, and are strongest for less educated relatives, consistent with favoritism rather than improved screening. We then provide evidence that nepotism operates as a bargaining device: mayors appoint the relatives of councilors, including those in the opposition, with the effects strongest when the mayor lacks a majority in the municipal council. Exploiting a second regression discontinuity design at the municipality level, we show that the premium for opposition councilors’ relatives increases when the opposition narrowly secures an additional seat, reinforcing the interpretation that appointments serve as political currency. Finally, we provide suggestive evidence that stricter regulation can help curb these nepotistic appointments.

Online meeting details

• Venue: Online (Microsoft Teams)
• Meeting ID: 342 205 610 445 35
• Passcode: xR2Lr9PB
• Join link: https://teams.microsoft.com/meet/34220561044535?p=WQjhddOoeGfnBbBJpD