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Title: Returns to Office in National and Local Politics

Author(s): Kaisa Kotakorpi, Panu Poutvaara and Marko Terviö

Publication Date: December 2014

Keyword(s): political careers, regression discontinuity and returns to office

Programme Area(s): Labour Economics

Abstract: We apply a regression discontinuity design to estimate the returns to being elected to parliament or to a municipal council. We present a bootstrap approach for measuring electoral closeness in any electoral system, and apply it to the Finnish proportional open list system. Getting elected to parliament increases annual earnings initially by about ?20,000. The time profile of the earnings effect suggests that the returns accrue mainly during the time in office, while the effect on subsequent earnings is small. Getting elected to a municipal council increases subsequent annual earnings by about ?1,000.

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Bibliographic Reference

Kotakorpi, K, Poutvaara, P and Terviö, M. 2014. 'Returns to Office in National and Local Politics'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=10293