Firms punish political extremists by withholding jobs

Board appointments represent highly lucrative career opportunities for former politicians. We investigate how board service relates to the strength of ideological partisanship for former members of Congress. We find that strong ideological partisanship is associated with a lower likelihood of being appointed to a board after Congress and that this holds for both liberals and conservatives. In addition, we use a difference-in-differences design to show that when the supply of senators willing to accept a directorship increases, firms become less likely to appoint ideological extremist senators to their boards. The results show that extremist legislators are effectively shut out of one of the most lucrative postelective career paths, placing a cost on radical behavior.
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