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Is it worth it? On the returns to holding political office

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  • Heléne Lundqvist

    () (Stockholm University)

Abstract

Despite the key role played by political payoffs in theory, very little is known empirically about the types of payoffs that motivate politicians. The purpose of this paper is to bring some light into this. I estimate causal effects of being elected in a local election on monetary returns. The claim for causality, I argue, can be made thanks to a research design where the income of some candidate who just barely won a seat is compared to that of some other candidate who was close to winning a seat for the same party, but ultimately did not. This research design is made possible thanks to a comprehensive, detailed data set covering all Swedish politicians who have run for office in the period 1991{2006. I establish that monetary returns are absent both in the short and long run. In stead, politicians seem to be motivated by non-monetary returns, and I show that being elected locally once (for exogenous reasons) can be an effective starting point for enjoying such payoffs.

Suggested Citation

  • Heléne Lundqvist, 2013. "Is it worth it? On the returns to holding political office," Working Papers 2013/14, Institut d'Economia de Barcelona (IEB).
  • Handle: RePEc:ieb:wpaper:2013/6/doc2013-14
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. 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.
    2. Kaisa Kotakorpi & Panu Poutvaara & Marko Tervio, 2013. "Returns to office in national and local politics," Discussion Papers 86, Aboa Centre for Economics.
    3. Lundin, Martin & Nordström Skans, Oskar & Zetterberg, Pär, 2016. "Leadership experiences, labor market entry, and early career trajectories," Working Paper Series 2016:2, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    4. repec:oup:qjecon:v:132:y:2017:i:4:p:1877-1914. is not listed on IDEAS
    5. Lindgren, Karl-Oskar & Oskarsson, Sven & T Dawes, Christopher, 2014. "Can political inequalities be educated away? Evidence from a Swedish school reform," Working Paper Series 2014:29, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    6. 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.
    7. Ernesto Dal Bó & Frederico Finan & Olle Folke & Torsten Persson & Johanna Rickne, 2017. "Who Becomes A Politician?," The Quarterly Journal of Economics, Oxford University Press, vol. 132(4), pages 1877-1914.

    More about this item

    Keywords

    Returns to politics; political career concerns; regression discontinuity design;

    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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