Politicians' Payments in a Proportional Party System

35 Pages Posted: 21 Feb 2019

Date Written: 2018

Abstract

Is politics a lucrative business? The question is approached in this paper, as one of few to quantify the monetary returns to holding political office in a typical developed democracy where parties are the main political actors. By applying a difference-in-difference setting with a carefully chosen control group to rich data on candidates to the Swedish national parliament, both short and long-run effects of being elected on different types of income are estimated. Results show that, yes, mostly thanks to relatively high remuneration while still in office, politics can be a lucrative business. In the long-run however, the effect is instead compositional in the sense that ex-politicians receive more pension income and work less.

Keywords: returns to politics, difference-in-difference

JEL Classification: C230, D720, J440

Suggested Citation

Berg, Heléne, Politicians' Payments in a Proportional Party System (2018). CESifo Working Paper No. 7278, Available at SSRN: https://ssrn.com/abstract=3338603 or http://dx.doi.org/10.2139/ssrn.3338603

Heléne Berg (Contact Author)

Stockholm University

Universitetsvägen 10
Stockholm, SE-106 91
Sweden

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