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Salaries and Work Effort: An Analysis of the European Union Parliamentarians

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  • Naci Mocan
  • Duha T. Altindag

Abstract

Prior to July 2009, salaries of the members of the European Parliament were paid by their home country and there were substantial salary differences between parliamentarians representing different EU countries. Starting in July 2009, the salary of each member of the Parliament is pegged to 38.5% of a European Court judge’s salary, paid by the EU. This created an exogenous change in salaries, the magnitude and direction of which varied substantially between parliamentarians. Parliamentarians receive per diem compensation for each meeting day attended during plenary sessions, but salaries constitute fixed income as they are independent of attendance to the Parliament. Using detailed information on each parliamentarian of the European Parliament between 2004 and 2011 we show that an increase in salaries reduces attendance to plenary sessions. An increase in salaries has also a negative impact on questions asked by parliamentarians in plenary sessions but it has no impact on other job-related activities.

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  • Naci Mocan & Duha T. Altindag, 2013. "Salaries and Work Effort: An Analysis of the European Union Parliamentarians," Auburn Economics Working Paper Series auwp2013-02, Department of Economics, Auburn University.
  • Handle: RePEc:abn:wpaper:auwp2013-02
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    Cited by:

    1. Duha T. Altindag & Naci Mocan, 2015. "Mobile Politicians: Opportunistic Career Moves and Moral Hazard," Koç University-TUSIAD Economic Research Forum Working Papers 1518, Koc University-TUSIAD Economic Research Forum.
    2. repec:bla:jcmkts:v:55:y:2017:i:2:p:368-386 is not listed on IDEAS
    3. Thomas Braendle, 2015. "Does remuneration affect the discipline and the selection of politicians? Evidence from pay harmonization in the European Parliament," Public Choice, Springer, vol. 162(1), pages 1-24, January.
    4. Morikawa, Masayuki, 2016. "A comparison of the wage structure between the public and private sectors in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 39(C), pages 73-90.
    5. Buisseret, Peter & Prato, Carlo, 2016. "Electoral control and the human capital of politicians," Games and Economic Behavior, Elsevier, vol. 98(C), pages 34-55.
    6. Arnold, Felix & Kauder, Björn & Potrafke, Niklas, 2014. "Outside earnings, absence, and activity: Evidence from German parliamentarians," European Journal of Political Economy, Elsevier, vol. 36(C), pages 147-157.
    7. Sutirtha Bagchi, 2017. "Does the Strength of Incentives Matter for Elected Officials? A Look at Tax Collectors," Villanova School of Business Department of Economics and Statistics Working Paper Series 34, Villanova School of Business Department of Economics and Statistics.
    8. Altindag, Duha T. & Filiz, S. Elif & Tekin, Erdal, 2017. "Does It Matter How and How Much Politicians are Paid?," GLO Discussion Paper Series 90, Global Labor Organization (GLO).
    9. Bernecker, Andreas, 2014. "Do politicians shirk when reelection is certain? Evidence from the German parliament," European Journal of Political Economy, Elsevier, vol. 36(C), pages 55-70.
    10. Karsten Mause, 2014. "Self-serving legislators? An analysis of the salary-setting institutions of 27 EU parliaments," Constitutional Political Economy, Springer, vol. 25(2), pages 154-176, June.
    11. Bernecker, Andreas, 2013. "Do Politicians Shirk when Reelection Is Certain? Evidence from the German Parliament," Working Papers 13-09, University of Mannheim, Department of Economics.
    12. Björn Kauder & Manuela Krause & Niklas Potrafke, 2016. "Electoral Cycles in MPs' Salaries: Evidence from the German States," CESifo Working Paper Series 6028, CESifo Group Munich.

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