Labor Supply of Politicians

Raymond Fisman; Nikolaj Arpe Harmon; Emir Kamenica; Inger  Munk

Labor Supply of Politicians

Raymond Fisman, Nikolaj Arpe Harmon, Emir Kamenica, Inger Munk

Økonomisk Institut

Abstract

Using data on Members of the European Parliament (MEPs), we examine the impact of salaries on the composition and the behavior of legislators. Employing a differences-in-differences approach, we exploit the introduction of a law that equalized MEPs’ salaries which had previously differed by as much as a factor of ten. We analyze the data through the lens of a simple, empirically supported model: MEPs produce legislative output using human capital (proxied by tenure and college quality) and effort (proxied by voting partici-pation). Doubling an MEP’s salary increases the probability she runs for reelection by 23 percentage points; thus, higher salaries increase tenure. Higher salaries, however, lower the other dimension of human capital: doubling the salary decreases the fraction of MEPs who attended a top school by 15 percent. Salary has no discernible impact on effort. Overall, higher salaries do not substantially improve legislative output; we can reject the null that doubling salaries in-creases legislative output by more than a fifth of a standard deviation. However, higher salaries do induce more political competition: doubling MEPs’ salaries increases the logarithm of the number of parties that field a candidate by 41 percent of a standard deviation.

Originalsprog	Engelsk
Udgiver	National Bureau of Economic Research
Antal sider	45
Status	Udgivet - jan. 2012

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http://www.econ.ku.dk/nharmon/docs/mepLaborSupply.pdf

Labor Supply of Politicians
Harmon, N. A. (Foredragsholder)
jan. 2014
Aktivitet: Tale eller præsentation - typer › Foredrag og mundtlige bidrag

Citationsformater

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Labor Supply of Politicians

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Labor Supply of Politicians

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