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Pay for politicians and candidate selection: An empirical analysis

  • Kotakorpi, Kaisa
  • Poutvaara, Panu

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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Article provided by Elsevier in its journal Journal of Public Economics.

Volume (Year): 95 (2011)
Issue (Month): 7 ()
Pages: 877-885

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Handle: RePEc:eee:pubeco:v:95:y:2011:i:7:p:877-885
DOI: 10.1016/j.jpubeco.2010.11.005
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  1. 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.
  2. Rafael Di Tella & Raymond Fisman, 2002. "Are Politicians Really Paid Like Bureaucrats?," NBER Working Papers 9165, National Bureau of Economic Research, Inc.
  3. 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.
  4. Persson, Torsten & Tabellini, Guido, 1997. "Political Economics and Macroeconomic Policy," CEPR Discussion Papers 1759, C.E.P.R. Discussion Papers.
  5. Andrea Mattozzi & Antonio Merlo, 2007. "Political Careers or Career Politicians?," NBER Working Papers 12921, National Bureau of Economic Research, Inc.
  6. Matthias Messner & Mattias Polborn, 2003. "Paying Politicians," Working Papers 246, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  7. Francine D. Blau & Lawrence M. Kahn, 2000. "Gender Differences in Pay," NBER Working Papers 7732, National Bureau of Economic Research, Inc.
  8. Poutvaara, Panu & Takalo, Tuomas, 2004. "Candidate Quality," IZA Discussion Papers 1195, Institute for the Study of Labor (IZA).
  9. Persson, Torsten & Tabellini, Guido, 1999. "Political Economics and Public Finance," CEPR Discussion Papers 2235, C.E.P.R. Discussion Papers.
  10. Francesco Caselli & Massimo Morelli, 2000. "Bad politicians," Discussion Paper / Institute for Empirical Macroeconomics 134, Federal Reserve Bank of Minneapolis.
  11. Stefano Gagliarducci & Tommaso Nannicini & Paolo Naticchioni, 2007. "Outside Income and Moral Hazard: The Elusive Quest for Good Politicians," Boston University - Department of Economics - The Institute for Economic Development Working Papers Series dp-164, Boston University - Department of Economics.
  12. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, Oxford University Press, vol. 119(1), pages 249-275.
  13. Napari, Sami, 2009. "Gender differences in early-career wage growth," Labour Economics, Elsevier, vol. 16(2), pages 140-148, April.
  14. 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.
  15. Tim Besley & Stephen Coate, . ""An Economic Model of Representative Democracy''," CARESS Working Papres 95-02, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences.
  16. Claudio Ferraz & Frederico Finan, 2009. "Motivating Politicians: The Impacts of Monetary Incentives on Quality and Performance," NBER Working Papers 14906, National Bureau of Economic Research, Inc.
  17. Rachel Croson & Uri Gneezy, 2009. "Gender Differences in Preferences," Journal of Economic Literature, American Economic Association, vol. 47(2), pages 448-74, June.
  18. Martin J. Osborne & Al Slivinksi, 1995. "A Model of Political Competition with Citizen-Candidates," Department of Economics Working Papers 1995-01, McMaster University.
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