Working Paper: NBER ID: w17726
Authors: Raymond Fisman; Nikolaj A. Harmon; Emir Kamenica; Inger Munk
Abstract: We examine the labor supply of politicians using data on Members of the European Parliament (MEPs). We exploit the introduction of a law that equalized MEPs' salaries, which had previously differed by as much as a factor of ten. Doubling an MEP's salary increases the probability of running for reelection by 23 percentage points and increases the logarithm of the number of parties that field a candidate by 29 percent of a standard deviation. A salary increase has no discernible impact on absenteeism or shirking from legislative sessions; in contrast, non-pecuniary motives, proxied by home-country corruption, substantially impact the intensive margin of labor supply. Finally, an increase in salary lowers the quality of elected MEPs, measured by the selectivity of their undergraduate institutions.
Keywords: No keywords provided
JEL Codes: D72; D73
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Salary changes (J31) | Probability of running for reelection (D72) |
| Salary increases (J31) | Likelihood of quitting before term completion (C41) |
| Salary increases (J31) | Absenteeism (J22) |
| Home-country corruption (H57) | Absenteeism (J22) |
| Salary increases (J31) | Quality of elected MEPs (D79) |