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Returns to Office in National and Local Politics

Author

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  • Poutvaara, Panu
  • Terviö, Marko
  • Kotakorpi, Kaisa

Abstract

We apply a regression discontinuity design to estimate the returns to being elected to parliament or to a municipal council. We present a bootstrap approach for measuring electoral closeness in any electoral system, and apply it to the Finnish proportional open list system. Getting elected to parliament increases annual earnings initially by about ?20,000. The time profile of the earnings effect suggests that the returns accrue mainly during the time in office, while the effect on subsequent earnings is small. Getting elected to a municipal council increases subsequent annual earnings by about ?1,000.

Suggested Citation

  • Poutvaara, Panu & Terviö, Marko & Kotakorpi, Kaisa, 2014. "Returns to Office in National and Local Politics," CEPR Discussion Papers 10293, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:10293
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    2. Fiva, Jon H. & Halse, Askill H., 2016. "Local favoritism in at-large proportional representation systems," Journal of Public Economics, Elsevier, vol. 143(C), pages 15-26.
    3. Cox, Gary W. & Fiva, Jon H. & Smith, Daniel M., 2020. "Measuring the Competitiveness of Elections," Political Analysis, Cambridge University Press, vol. 28(2), pages 168-185, April.
    4. Freier, Ronny & Odendahl, Christian, 2015. "Do parties matter? Estimating the effect of political power in multi-party systems," European Economic Review, Elsevier, vol. 80(C), pages 310-328.
    5. 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.
    6. Hyytinen, Ari & Merilã„Inen, Jaakko & Saarimaa, Tuukka & Toivanen, Otto & Tukiainen, Janne, 2018. "Public Employees as Politicians: Evidence from Close Elections," American Political Science Review, Cambridge University Press, vol. 112(1), pages 68-81, February.
    7. Meriläinen, Jaakko & Tukiainen, Janne, 2016. "Primary Effect in Open-List Elections," Working Papers 79, VATT Institute for Economic Research.
    8. Thomas Braendle & Alois Stutzer, 2017. "Voters and Representatives: How Should Representatives Be Selected?," CREMA Working Paper Series 2017-05, Center for Research in Economics, Management and the Arts (CREMA).
    9. Mahadevan, Meera & Shenoy, Ajay, 2023. "The political consequences of resource scarcity: Targeted spending in a water-stressed democracy," Journal of Public Economics, Elsevier, vol. 220(C).
    10. Björn Kauder & Manuela Krause & Niklas Potrafke, 2018. "Electoral cycles in MPs’ salaries: evidence from the German states," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 25(4), pages 981-1000, August.
    11. Shenoy, Ajay & Zimmermann, Laura V., 2021. "The Workforce of Clientelism: The Case of Local Officials in the Party Machine," GLO Discussion Paper Series 916, Global Labor Organization (GLO).
    12. Hyytinen, Ari & Saarimaa, Tuukka & Tukiainen, Janne, 2014. "Electoral vulnerability and size of local governments: Evidence from voting on municipal mergers," Journal of Public Economics, Elsevier, vol. 120(C), pages 193-204.

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    More about this item

    Keywords

    Political careers; Regression discontinuity; Returns to office;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets

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