Labor Supply of Politicians

40 Pages Posted: 6 Jan 2012 Last revised: 9 Jan 2012

See all articles by Raymond J. Fisman

Raymond J. Fisman

National Bureau of Economic Research (NBER); Boston University

Nikolaj A. Harmon

University of Copenhagen - Department of Economics

Emir Kamenica

University of Chicago

Inger Munk

affiliation not provided to SSRN

Date Written: January 2012

Abstract

We examine the labor supply of politicians using data on Members of the European Parliament (MEPs). We exploit the introduction of a law that equalized MEPs' salaries, which had previously differed by as much as a factor of ten. Doubling an MEP's salary increases the probability of running for reelection by 23 percentage points and increases the logarithm of the number of parties that field a candidate by 29 percent of a standard deviation. A salary increase has no discernible impact on absenteeism or shirking from legislative sessions; in contrast, non-pecuniary motives, proxied by home-country corruption, substantially impact the intensive margin of labor supply. Finally, an increase in salary lowers the quality of elected MEPs, measured by the selectivity of their undergraduate institutions.

Suggested Citation

Fisman, Raymond and Harmon, Nikolaj Arpe and Kamenica, Emir and Munk, Inger, Labor Supply of Politicians (January 2012). NBER Working Paper No. w17726. Available at SSRN: https://ssrn.com/abstract=1980576

Raymond Fisman (Contact Author)

National Bureau of Economic Research (NBER)

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Boston University ( email )

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Boston, MA 02215
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Nikolaj Arpe Harmon

University of Copenhagen - Department of Economics ( email )

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Bygning 26
1353 Copenhagen K.
Denmark

HOME PAGE: http://www.econ.ku.dk/nharmon

Emir Kamenica

University of Chicago ( email )

1101 East 58th Street
Chicago, IL 60637
United States

Inger Munk

affiliation not provided to SSRN

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