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Pay for politicians and candidate selection: An empirical analysis

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  • Kotakorpi, Kaisa
  • Poutvaara, Panu

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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Bibliographic Info

Paper provided by University of Munich, Department of Economics in its series Munich Reprints in Economics with number 19489.

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Date of creation: 2011
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Publication status: Published in Journal of Public Economics 7-8 95(2011): pp. 877-885
Handle: RePEc:lmu:muenar:19489

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  1. Persson, Torsten & Tabellini, Guido, 1999. "Political Economics and Public Finance," CEPR Discussion Papers 2235, C.E.P.R. Discussion Papers.
  2. Rafael Di Tella & Raymond Fisman, 2002. "Are Politicians Really Paid Like Bureaucrats?," NBER Working Papers 9165, National Bureau of Economic Research, Inc.
  3. Andrea Mattozzi & Antonio Merlo, 2007. "Political Careers or Career Politicians?," NBER Working Papers 12921, National Bureau of Economic Research, Inc.
  4. 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.
  5. Ferraz, Claudio & Finan, Frederico S., 2008. "Motivating Politicians: The Impacts of Monetary Incentives on Quality and Performance," IZA Discussion Papers 3411, Institute for the Study of Labor (IZA).
  6. 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.
  7. Stefano Gagliarducci & Tommaso Nannicini, 2008. "Do Better Paid Politicians Perform Better? Disentangling Incentives from Selection," Working Papers 346, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  8. Kotakorpi, Kaisa & Poutvaara, Panu, 2011. "Pay for politicians and candidate selection: An empirical analysis," Munich Reprints in Economics 19489, University of Munich, Department of Economics.
  9. Panu Poutvaara & Tuomas Takalo, 2003. "Candidate Quality," CESifo Working Paper Series 1106, CESifo Group Munich.
  10. Torsten Persson & Guido Tabellini, 1997. "Political Economics and Macroeconomic Policy," NBER Working Papers 6329, National Bureau of Economic Research, Inc.
  11. Rachel Croson & Uri Gneezy, 2009. "Gender Differences in Preferences," Journal of Economic Literature, American Economic Association, vol. 47(2), pages 448-74, June.
  12. 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.
  13. 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.
  14. Francine D. Blau & Lawrence M. Kahn, 2000. "Gender Differences in Pay," NBER Working Papers 7732, National Bureau of Economic Research, Inc.
  15. Daniel Diermeier & Michael Keane & Antonio Merlo, 2004. "A Political Economy Model of Congressional Careers," Discussion Papers 1387, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  16. Caselli, Francesco & Morelli, Massimo, 2000. "Bad Politicians," CEPR Discussion Papers 2402, C.E.P.R. Discussion Papers.
  17. Napari, Sami, 2009. "Gender differences in early-career wage growth," Labour Economics, Elsevier, vol. 16(2), pages 140-148, April.
  18. Messner, Matthias & Polborn, Mattias K., 2004. "Paying politicians," Journal of Public Economics, Elsevier, vol. 88(12), pages 2423-2445, December.
    • Matthias Messner & Mattias Polborn, 2003. "Paying Politicians," Working Papers 246, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
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