Labor Supply of Politicians

Raymond Fisman, Nikolaj Arpe Harmon, Emir Kamenica, Inger Munk

Research output: Working paperResearch

Abstract

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 ten. Increasing salaries raises the fraction of MEPs who run
for reelection but decreases the quality of elected MEPs (proxied by college quality.) Salary has no discernible impact on effort or legislative output. Higher salaries induce more political competition.
Original languageEnglish
PublisherNational Bureau of Economic Research
Number of pages45
Publication statusPublished - Jan 2012

Bibliographical note

JEL classification: D72, D73

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