The effects of political uncertainty on the demand for high-skill workers

This study examines how political uncertainty affects high-skill labor demand among US public firms. Using close gubernatorial elections as an exogenous shock and job postings data, I find that firms increase skilled hiring, mainly through higher R&D investments. Firms shift labor demand to nearby states with stable policies, creating spillover effects. In counties outside uncertain states, higher exposure to treated firms leads to modest job gains for college-educated workers and a slight unemployment decline, with no wage impact. These findings highlight firms as key channels for transmitting political uncertainty across labor markets.