Returns to Office in National and Local Politics

50 Pages Posted: 7 Jul 2016

See all articles by Kaisa Kotakorpi

Kaisa Kotakorpi

University of Turku - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Panu Poutvaara

University of Helsinki - Department of Economics; Helsinki Center of Economic Research (HECER); CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics

Marko Terviö

Aalto University

Multiple version iconThere are 3 versions of this paper

Abstract

We estimate the effect of getting elected on future income development of political candidates. We present a bootstrap approach for measuring electoral closeness, which can be used to implement a regression discontinuity design in any electoral system. We apply the method to the Finnish proportional open list system. Being elected to parliament increases annual earnings initially by €20,000, and getting elected to a municipal council by €1,000. The returns to office for parliamentarians accrue mainly through higher wages during the time in office. Our results imply that the returns to office may be large even in the absence of corruption.

Keywords: returns to office, elections, regression discontinuity

JEL Classification: D72, J45

Suggested Citation

Kotakorpi, Kaisa and Poutvaara, Panu and Terviö, Marko, Returns to Office in National and Local Politics. IZA Discussion Paper No. 10003, Available at SSRN: https://ssrn.com/abstract=2803835

Kaisa Kotakorpi (Contact Author)

University of Turku - Department of Economics ( email )

Turku
Finland

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Panu Poutvaara

University of Helsinki - Department of Economics ( email )

P.O. Box 54
FIN-00014 Helsinki
Finland

HOME PAGE: http://www.valt.helsinki.fi/blogs/poutvaar/

Helsinki Center of Economic Research (HECER) ( email )

FI-00014 Helsinki
Finland

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Marko Terviö

Aalto University ( email )

P.O. Box 21240
Helsinki, 00101
Finland

HOME PAGE: http://hse-econ.fi/tervio

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