by Louis-Philippe Beland
Politicians and political parties play a crucial role in the US economy. The common perception is that Democrats favor pro-labor policies and are more averse to income inequality than Republicans. In recent research, I evaluate the impact of political party affiliation of governors (Republican versus Democratic) by looking at the following labor market outcomes: hours worked, weeks worked, employment, labor-force participation, and earnings. Given that there is an important and well-documented earnings gap between black and white workers, I investigate whether the party affiliation of governors affects this gap. This is an important issue given that a large proportion of black workers vote for Democrats.
I find that under Democratic governors, blacks are more likely to work, participate in the labor market, and work more intensively. This leads to an increase in the annual hours worked by blacks relative to whites, which decreases the earnings gap between blacks and whites.