Getting Rich(er) in Office? Corruption and Wealth Accumulation in Congress
28 Pages Posted: 13 Aug 2009 Last revised: 7 Sep 2009
Date Written: 2009
How corrupt is Congress? We provide an indirect test by comparing wealth accumulation among U.S. House members and the public. Using wealth data from representatives’ Personal Financial Disclosure forms and from the Panel Study of Income Dynamics, we examine whether representatives accumulate wealth faster than expected. To do so, we first use difference-in-differences, least squares regression, and median regression estimators, conditioning on variables such as the value of households’ stock, cash, business, and land assets, their debts, and demographic variables. These estimators find representatives accumulating wealth about 50 percent faster than expected. Next, we employ matching. Unlike these estimators, matching finds an almost identical rate of wealth accumulation in both groups. Matching may yield such a different finding because it reduces bias from modeling errors. Since the distribution of wealth has a complex shape that is difficult to parameterize, such errors are likely. We thus conclude that representatives report accumulating wealth at a rate consistent with similar non-representatives, potentially suggesting that corruption in Congress is not widespread.
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