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Returns to Office in National and Local Politics

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  • Kaisa Kotakorpi
  • Panu Poutvaara
  • Marko Terviö

Abstract

We study the returns to political office using data from Finnish parliamentary elections in 1970-2007 and municipal elections in 1996-2008. The discontinuity of electoral outcomes in individual candidate votes allows us to estimate the causal effect of being elected on subsequent income. Getting elected to parliament increases annual earnings initially by about €20,000, but most of this effect fades out over time. Getting elected to a municipal council has a positive effect of about €1,000 on subsequent annual earnings.

Suggested Citation

  • Kaisa Kotakorpi & Panu Poutvaara & Marko Terviö, 2013. "Returns to Office in National and Local Politics," CESifo Working Paper Series 4542, CESifo.
    • Handle: RePEc:ces:ceswps:_4542
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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 & Meriläinen, 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

    returns to office; elections; regression discontinuity;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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