Returns to Office in National and Local Politics

46 Pages Posted: 23 Jan 2015

See all articles by Kaisa Kotakorpi

Kaisa Kotakorpi

University of Turku - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Panu Poutvaara

Ludwig Maximilian University of Munich (LMU) - Faculty of Economics; ifo Institut - Leibniz-Institut fuer Wirtschaftsforschung an der Universitaet Muenchen e.V.; CESifo (Center for Economic Studies and Ifo Institute); CReAM; IZA Institute of Labor Economics

Marko Terviö

Aalto University

Multiple version iconThere are 3 versions of this paper

Date Written: December 2014

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.

Keywords: political careers, regression discontinuity, returns to office

JEL Classification: D72, J45

Suggested Citation

Kotakorpi, Kaisa and Poutvaara, Panu and Terviö, Marko, Returns to Office in National and Local Politics (December 2014). CEPR Discussion Paper No. DP10293, Available at SSRN: https://ssrn.com/abstract=2554348

Kaisa Kotakorpi (Contact Author)

University of Turku - Department of Economics ( email )

Turku
Finland

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Panu Poutvaara

Ludwig Maximilian University of Munich (LMU) - Faculty of Economics ( email )

Ludwigstrasse 28
Munich, D-80539
Germany

HOME PAGE: http://www.iiv.vwl.uni-muenchen.de/index.html

ifo Institut - Leibniz-Institut fuer Wirtschaftsforschung an der Universitaet Muenchen e.V. ( email )

Poschinger Str. 5
Munich, 01069
Germany
00498992241372 (Phone)

HOME PAGE: http://https://www.ifo.de/poutvaara-p

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

CReAM ( email )

Drayton House
30 Gordon Street
London, WC1H 0AX
United Kingdom

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

HOME PAGE: http://www.iza.org/en/webcontent/personnel/photos/index_html?key=1501

Marko Terviö

Aalto University ( email )

P.O. Box 21240
Helsinki, 00101
Finland

HOME PAGE: http://hse-econ.fi/tervio

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