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Pay for Politicians and Candidate Selection: An Empirical Analysis

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  • Kaisa Kotakorpi
  • Panu Poutvaara

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Abstract

A growing theoretical literature on the effect of politicians’ salaries on the average level of skills of political candidates yields ambiguous predictions. In this paper, we estimate the effect of pay for politicians on the level of education of parliamentary candidates. We take advantage of an exceptional reform where the salaries of Finnish MPs were increased by 35 % in the year 2000, intended to make the pay for parliamentarians more competitive. A difference-in-differences analysis, using candidates in municipal elections as a control group, suggests that the higher salary increased the fraction of candidates with higher education among female candidates, while we find no significant effect for male candidates.

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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3126.

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Date of creation: 2010
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Handle: RePEc:ces:ceswps:_3126

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Keywords: pay for politicians; candidate selection; gender differences in politics;

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References

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  1. Stefano Gagliarducci & Tommaso Nannicini, 2013. "Do Better Paid Politicians Perform Better? Disentangling Incentives From Selection," Journal of the European Economic Association, European Economic Association, vol. 11(2), pages 369-398, 04.
  2. Frederico Finan & Claudio Ferraz, 2009. "Motivating Politicians: The Impacts of Monetary Incentives on Quality and Performance," Working Papers id:1889, eSocialSciences.
  3. Francine D. Blau & Lawrence M. Kahn, 2000. "Gender Differences in Pay," NBER Working Papers 7732, National Bureau of Economic Research, Inc.
  4. Rafael Di Tella & Raymond Fisman, 2002. "Are Politicians Really Paid Like Bureaucrats?," NBER Working Papers 9165, National Bureau of Economic Research, Inc.
  5. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-in-Differences Estimates?," The Quarterly Journal of Economics, MIT Press, vol. 119(1), pages 249-275, February.
  6. Francesco Caselli & Massimo Morelli, 2000. "Bad politicians," Discussion Paper / Institute for Empirical Macroeconomics 134, Federal Reserve Bank of Minneapolis.
  7. Kaisa Kotakorpi & Panu Poutvaara, 2010. "Pay for Politicians and Candidate Selection: An Empirical Analysis," CESifo Working Paper Series 3126, CESifo Group Munich.
  8. Andrea Mattozzi & Antonio Merlo, 2007. "Political Careers or Career Politicians?," NBER Working Papers 12921, National Bureau of Economic Research, Inc.
  9. Besley, Timothy & Coate, Stephen, 1997. "An Economic Model of Representative Democracy," The Quarterly Journal of Economics, MIT Press, vol. 112(1), pages 85-114, February.
  10. Torsten Persson & Guido Tabellini, . "Political Economics and Macroeconomic Policy," Working Papers 121, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  11. Matthias Messner & Mattias Polborn, 2003. "Paying Politicians," Working Papers 246, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  12. Torsten Persson & Guido Tabellini, 1999. "Political Economics and Public Finance," NBER Working Papers 7097, National Bureau of Economic Research, Inc.
  13. Daniel Diermeier & Michael Keane & Antonio Merlo, 2005. "A Political Economy Model of Congressional Careers," American Economic Review, American Economic Association, vol. 95(1), pages 347-373, March.
  14. Stefano Gagliarducci & Tommaso Nannicini & Paolo Naticchioni, 2007. "Outside income and moral hazard : the elusive quest for good politicians," Economics Working Papers we073218, Universidad Carlos III, Departamento de Economía.
  15. Panu Poutvaara & Tuomas Takalo, 2003. "Candidate Quality," CESifo Working Paper Series 1106, CESifo Group Munich.
  16. Rachel Croson & Uri Gneezy, 2009. "Gender Differences in Preferences," Journal of Economic Literature, American Economic Association, vol. 47(2), pages 448-74, June.
  17. Osborne, Martin J & Slivinski, Al, 1996. "A Model of Political Competition with Citizen-Candidates," The Quarterly Journal of Economics, MIT Press, vol. 111(1), pages 65-96, February.
  18. Napari, Sami, 2009. "Gender differences in early-career wage growth," Labour Economics, Elsevier, vol. 16(2), pages 140-148, April.
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