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Politicians' outside earnings and electoral competition

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Listed:
  • Becker, Johannes
  • Peichl, Andreas
  • Rincke, Johannes

Abstract

This paper deals with the impact of electoral competition on politicians´ outside earnings. We propose a simple theoretical model with politicians facing a tradeoff between allocating their time to political effort or to an alternative use generating outside earnings. The model has a testable implication stating that the amount of time spent on outside work is negatively related to the degree of electoral competition. We test this implication using a new dataset on outside earnings of members of the German federal assembly. Taking into account the potential endogeneity of measures of political competition that depend on past election outcomes, we find that politicians facing low competition have substantially higher outside earnings.

Suggested Citation

  • Becker, Johannes & Peichl, Andreas & Rincke, Johannes, 2008. "Politicians' outside earnings and electoral competition," FiFo Discussion Papers - Finanzwissenschaftliche Diskussionsbeiträge 08-3, University of Cologne, FiFo Institute for Public Economics.
    • Handle: RePEc:zbw:uoccpe:7220
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    References listed on IDEAS

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    More about this item

    Keywords

    Political competition; outside earnings; political rents;
    All these keywords.

    JEL classification:

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

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