Working Paper: CEPR ID: DP10293
Authors: Kaisa Kotakorpi; Panu Poutvaara; Marko Tervi
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.
Keywords: political careers; regression discontinuity; returns to office
JEL Codes: D72; J45
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Annual earnings (J31) | Subsequent earnings outside of politics (H59) |
| Winning elections (K16) | Subsequent capital income (D33) |
| Earnings effect after significant salary increase (J31) | Returns to office (I26) |
| Being elected to parliament (D72) | Annual earnings (J31) |
| Getting elected to municipal council (K16) | Earnings (J31) |
| Getting elected to parliament (D72) | Earnings in second electoral period (D79) |
| Getting elected to parliament (D72) | Earnings in third electoral period (J39) |