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Money, Political Ambition, and the Career Decisions of Politicians

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  • Michael P. Keane

    ()
    (Department of Economics, Arizona State University)

  • Antonio Merlo

    ()
    (Department of Economics, University of Pennsylvania)

Abstract

In this paper we assess the impact of a variety of policies that may influence the career decisions of members of the U.S. Congress, using the empirical framework of Diermeier, Keane and Merlo (2005). These policies alter incentives to run for re-election, run for higher office or leave Congress, by altering wages, nonpecuniary rewards and career prospects (both in and out of Congress). We find that reducing the relative wage of politicians would substantially reduce the duration of congressional careers. Notably, however, the effect varies considerably across different types of politicians. A reduction in the congressional wage would disproportionately induce exit from Congress by “skilled” politicians, Democrats, politicians who were relatively young when first elected, and those without pre-congressional political experience. Interestingly, however, it would not cause the type of politicians who most value legislative accomplishments (“achievers”) to disproportionately exit Congress. Thus, wage reductions would not reduce the “quality” composition of Congress in this sense. Term limits also have similar effects on achievers and non-achievers. However, we find that term limits would disproportionately induce members of the majority party to exit Congress. This has the interesting implication that term limits make it more difficult to sustain substantial congressional majorities over time. We do find three types of policies that disproportionately induce nonachievers to leave Congress: (i) elimination of seniority as a determinant of key committee assignments, (ii) restricting private sector employment after leaving Congress, and (iii) reducing the seniority advantage in elections.

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Bibliographic Info

Paper provided by Penn Institute for Economic Research, Department of Economics, University of Pennsylvania in its series PIER Working Paper Archive with number 07-016.

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Length: 51 pages
Date of creation: 01 May 2007
Date of revision:
Handle: RePEc:pen:papers:07-016

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Keywords: politicians; political careers; monetary and non-monetary incentives; U.S. Congress;

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References

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  1. Andrea Mattozzi & Antonio Merlo, 2007. "Political Careers or Career Politicians?," NBER Working Papers 12921, National Bureau of Economic Research, Inc.
  2. Daniel Diermeier & Michael Keane & Antonio Merlo, 2004. "A Political Economy Model of Congressional Careers," Discussion Papers, Northwestern University, Center for Mathematical Studies in Economics and Management Science 1387, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  3. Tim Groseclose & Jeffrey Milyo, 1999. "Buying the Bums Out: What's the Dollar Value of a Seat in Congress?," Discussion Papers Series, Department of Economics, Tufts University, Department of Economics, Tufts University 9923, Department of Economics, Tufts University.
  4. Caselli, Francesco & Morelli, Massimo, 2004. "Bad politicians," Journal of Public Economics, Elsevier, Elsevier, vol. 88(3-4), pages 759-782, March.
  5. Messner, Matthias & Polborn, Mattias K., 2004. "Paying politicians," Journal of Public Economics, Elsevier, 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.
  6. Antonio Merlo, 2005. "Whither Political Economy? Theories, Facts and Issues," PIER Working Paper Archive 05-033, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 01 Dec 2005.
  7. Ernesto Dal B� & Pedro Dal B� & Jason Snyder, 2009. "Political Dynasties," Review of Economic Studies, Oxford University Press, vol. 76(1), pages 115-142.
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