Is it Worth it? On the Returns to Holding Political Office

IEB Working Paper N. 2013/014

58 Pages Posted: 13 Mar 2014

See all articles by Heléne Lundqvist

Heléne Lundqvist

Department of Economics, Stockholm University

Date Written: May 8, 2013

Abstract

Despite the key role played by political payoffs in theory, very little is known empirically about the types of payoffs that motivate politicians. The purpose of this paper is to bring some light into this. I estimate causal effects of being elected in a local election on monetary returns. The claim for causality, I argue, can be made thanks to a research design where the income of some candidate who just barely won a seat is compared to that of some other candidate who was close to winning a seat for the same party, but ultimately did not. This research design is made possible thanks to a comprehensive, detailed data set covering all Swedish politicians who have run for office in the period 1991{2006. I establish that monetary returns are absent both in the short and long run. Instead, politicians seem to be motivated by non-monetary returns, and I show that being elected locally once (for exogenous reasons) can be an effective starting point for enjoying such payoffs.

Keywords: Returns to politics, political career concerns, regression discontinuity design

JEL Classification: C23, D72, J44

Suggested Citation

Lundqvist, Heléne, Is it Worth it? On the Returns to Holding Political Office (May 8, 2013). IEB Working Paper N. 2013/014. Available at SSRN: https://ssrn.com/abstract=2341119 or http://dx.doi.org/10.2139/ssrn.2341119

Heléne Lundqvist (Contact Author)

Department of Economics, Stockholm University ( email )

Universitetsvägen 10
Stockholm, Stockholm SE-106 91
Sweden

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