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Politicians' Payments in a Proportional Party System

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  • Heléne Berg

Abstract

Is politics a lucrative business? The question is approached in this paper, as one of few to quantify the monetary returns to holding political office in a typical developed democracy where parties are the main political actors. By applying a difference-in-difference setting with a carefully chosen control group to rich data on candidates to the Swedish national parliament, both short and long-run effects of being elected on different types of income are estimated. Results show that, yes, mostly thanks to relatively high remuneration while still in office, politics can be a lucrative business. In the long-run however, the effect is instead compositional in the sense that ex-politicians receive more pension income and work less.

Suggested Citation

  • Heléne Berg, 2018. "Politicians' Payments in a Proportional Party System," CESifo Working Paper Series 7278, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_7278
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    File URL: https://www.cesifo-group.de/DocDL/cesifo1_wp7278.pdf
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    References listed on IDEAS

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    Cited by:

    1. Berg, Heléne, 2018. "Is It Worth It? On the Returns to Holding Political Office," Research Papers in Economics 2018:5, Stockholm University, Department of Economics.
    2. Heléne Berg, 2018. "Is It Worth It? On the Returns to Holding Political Office," CESifo Working Paper Series 7406, CESifo Group Munich.

    More about this item

    Keywords

    returns to politics; difference-in-difference;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations

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