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Pay for Politicians and Candidate Selection: An Empirical Analysis

  • Kaisa Kotakorpi
  • Panu Poutvaara


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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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3126.

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Date of creation: 2010
Date of revision:
Handle: RePEc:ces:ceswps:_3126
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  1. Napari, Sami, 2009. "Gender differences in early-career wage growth," Labour Economics, Elsevier, vol. 16(2), pages 140-148, April.
  2. Torsten Persson & Guido Tabellini, 1999. "Political Economics and Public Finance," NBER Working Papers 7097, National Bureau of Economic Research, Inc.
  3. Gagliarducci, Stefano & Nannicini, Tommaso & Naticchioni, Paolo, 2008. "Outside Income and Moral Hazard: The Elusive Quest for Good Politicians," IZA Discussion Papers 3295, Institute for the Study of Labor (IZA).
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  5. Francesco Caselli & Massimo Morelli, 2000. "Bad politicians," Discussion Paper / Institute for Empirical Macroeconomics 134, Federal Reserve Bank of Minneapolis.
  6. 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.
  7. Panu Poutvaara & Tuomas Takalo, 2007. "Candidate quality," International Tax and Public Finance, Springer, vol. 14(1), pages 7-27, February.
  8. 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.
  9. Kaisa Kotakorpi & Panu Poutvaara, 2010. "Pay for Politicians and Candidate Selection: An Empirical Analysis," CESifo Working Paper Series 3126, CESifo Group Munich.
  10. repec:oup:qjecon:v:119:y:2004:i:1:p:249-275 is not listed on IDEAS
  11. Antonio Merlo & Andrea Mattozzi, 2005. "Political Careers or Career Politicians?," 2005 Meeting Papers 740, Society for Economic Dynamics.
  12. 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.
  13. Francine D. Blau & Lawrence M. Kahn, 2000. "Gender Differences in Pay," NBER Working Papers 7732, National Bureau of Economic Research, Inc.
  14. Torsten Persson & Guido Tabellini, . "Political Economics and Macroeconomic Policy," Working Papers 121, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  15. Stefano Gagliarducci & Tommaso Nannicini, 2013. "Do Better Paid Politicians Perform Better? Disentangling Incentives From Selection," Journal of the European Economic Association, European Economic Association, vol. 11(2), pages 369-398, 04.
  16. Rachel Croson & Uri Gneezy, 2009. "Gender Differences in Preferences," Journal of Economic Literature, American Economic Association, vol. 47(2), pages 448-74, June.
  17. Di Tella, Rafael & Fisman, Raymond, 2004. "Are Politicians Really Paid Like Bureaucrats?," Journal of Law and Economics, University of Chicago Press, vol. 47(2), pages 477-513, October.
  18. repec:oup:qjecon:v:112:y:1997:i:1:p:85-114 is not listed on IDEAS
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