A Political Economy Model of Congressional Careers, Second Version

41 Pages Posted: 2 Oct 2004

See all articles by Daniel Diermeier

Daniel Diermeier

Northwestern University - Kellogg School of Management

Michael P. Keane

Arizona State University (ASU) - Economics Department; University of Technology, Sydney (Visiting July 2006-Present)

Antonio Merlo

University of Pennsylvania - Department of Economics; Rice University

Date Written: September 2004

Abstract

Theories in political economy depend critically on assumptions about motivations of politicians. Our analysis starts from the premise that politicians, like other economic agents, are rational individuals who make career decisions by comparing the expected returns of alternative choices. The main goal of the paper is to quantify the returns to a career in the United States Congress. To achieve this goal we specify a dynamic model of career decisions of a member of Congress and we estimate this model using a newly collected data set. Given estimates of the structural model, we assess reelection probabilities for members of Congress, estimate the effect of congressional experience on private and public sector wages, and quantify the value of a congressional seat. Moreover, we use the estimated model to assess how an increase in the congressional wage or the imposition of term limits would affect the career decisions of politicians and the returns to a career in Congress.

Keywords: political careers, politicians, elections, term limits

JEL Classification: D72, J44, J45

Suggested Citation

Diermeier, Daniel and Keane, Michael P. and Merlo, Antonio M., A Political Economy Model of Congressional Careers, Second Version (September 2004). PIER Working Paper No. 04-037. Available at SSRN: https://ssrn.com/abstract=598841 or http://dx.doi.org/10.2139/ssrn.598841

Daniel Diermeier

Northwestern University - Kellogg School of Management ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

Michael P. Keane

Arizona State University (ASU) - Economics Department ( email )

Tempe, AZ 85287-3806
United States

University of Technology, Sydney (Visiting July 2006-Present)

PO Box 123 Broadway
NSW 2007
Australia
480-965-1053 (Phone)
480-965-0748 (Fax)

Antonio M. Merlo (Contact Author)

University of Pennsylvania - Department of Economics ( email )

Ronald O. Perelman Center for Political Science
133 South 36th Street
Philadelphia, PA 19104-6297
United States
215-898-7933 (Phone)
215-573-2057 (Fax)

HOME PAGE: http://www.ssc.upenn.edu/~merloa

Rice University ( email )

6100 South Main Street
Houston, TX 77005-1892
United States

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