Pay for politicians and candidate selection: An empirical analysis

Abstract

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The politicians’ wage gap: insights from German members of parliament

“…From a normative perspective, a positive PWG could be beneficial for society if it attracted more able individuals to run for office and as a consequence yielded a more efficient provision of public goods. Yet, recent theoretical and empirical studies show that higher earnings need not necessarily lead to better politicians (Poutvaara and Takalo, 2007;Kotakorpi and Poutvaara, 2011). We contribute to this result by showing that becoming a politician is financially attractive for the average executive (and even more so for the average citizen) but not for top-level managers and business-owners.…”

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

“…7 On the empirical part, two studies with similar focus yield the same results: Ferraz and Finan (2009) and Gagliarducci and Nannicini (2011) both estimate positive effects of increased wages on performance and selection-the former for local politicians in Brazil and the latter for Italian mayors. For Finland, Kotakorpi and Poutvaara (2010) find that a policy-induced salary increase among members of parliament raised the average level of education among female candidates but not among males. Finally, Keane and Merlo (2010) use the framework and data from Diermeier et al (2005) to simulate a variety of policy changes and study whether the effects are disproportionate across different types of politicians.…”

Behavioral political economy: A survey

“…There is some evidence showing that positive incentives are associated with the desired positive effects on performance. Kotakorpi and Poutvaara (2011) show that a salary increase in Finland drew more skilled representatives into parliament, but have no evidence on actual performance. For Italy, on the other hand, Gagliarducci & Nannicini (2013) 47 See also the recent survey by Alm (2012) for a broad overview on the empirical literature on tax evasion and its determinants, which generally supports the theoretical relationships discussed here.…”