Politicians' Outside Earnings and Electoral Competition
University of Cologne
Institute for the Study of Labor (IZA); University of Cologne - Cologne Centre for Public Economics (CPE); University of Essex - Institute for Social and Economic Research (ISER)
Ludwig-Maximilians-Universität Munich; CESifo (Center for Economic Studies and Ifo Institute for Economic Research)
March 12, 2008
FiFo-CPE Discussion Paper No. 08-3
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.
Number of Pages in PDF File: 25
Keywords: political competition, outside earnings, political rents
JEL Classification: D72, J45working papers series
Date posted: March 19, 2008
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo6 in 0.579 seconds