Does Better Pay Make Better Politicians?
In the private sector, salary is one of an employer’s most effective tools for attracting top talent. Does the same hold for legislators?
Does Better Pay Make Better Politicians?Paper Labor Supply of Politicians
Using data on Members of the European Parliament (MEPs), we examine the impact of salaries on the composition and the behavior of legislators. Employing a differences-in-differences approach, we exploit the introduction of a law that equalized MEPs' salaries which had previously differed by as much as a factor of 10. Increasing salaries raises the fraction of MEPs who run for re-election but decreases the quality of elected MEPs (proxied by college quality). Salary has no discernible impact on effort or legislation output. Higher salaries induce more political competition.
Published in: Journal of the European Economic Association
- Authored by
- 2015
- Political Economy
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