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Money, Political Ambition, and the Career Decisions of Politicians, Second Version

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Author Info

  • Michael P. Keane

    ()
    (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, non-pecuniary 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, and politicians who were relatively young when first elected. 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 non-achievers 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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File URL: http://economics.sas.upenn.edu/system/files/working-papers/10-009.pdf
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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 10-009.

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Length: 38 pages
Date of creation: 01 May 2007
Date of revision: 01 Feb 2010
Handle: RePEc:pen:papers:10-009

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Related research

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

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Cited by:
  1. Geys, Benny & Mause, Karsten, 2011. "Moonlighting politicians: A survey and research agenda," Discussion Papers, Research Professorship & Project "The Future of Fiscal Federalism" SP II 2011-101, Social Science Research Center Berlin (WZB).

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