A1 Refereed original research article in a scientific journal
Returns to Office in National and Local Politics: A Bootstrap Method and Evidence from Finland
Authors: Kaisa Kotakorpi, Panu Poutvaara, Marko Terviö
Publisher: Oxford University Press
Publication year: 2017
Journal: Journal of Law, Economics, and Organization
Journal name in source: JOURNAL OF LAW ECONOMICS & ORGANIZATION
Journal acronym: J LAW ECON ORGAN
Volume: 33
Issue: 3
First page : 413
Last page: 442
Number of pages: 30
ISSN: 8756-6222
eISSN: 1465-7341
DOI: https://doi.org/10.1093/jleo/ewx010
Abstract
We estimate the private returns to being elected to parliament or to a municipal council using a regression discontinuity (RD) design. We first present a bootstrap method for measuring the closeness of elections, which can be applied to any electoral system. We then apply the method to perform a RD estimation in Finland, where seats are assigned according to a proportional open-list system. Becoming a member of parliament increases annual earnings initially by about (sic)20,000, and getting elected to a municipal council by about (sic)1000. Subsequent earnings dynamics reveal that the returns to parliamentarians accrue mainly during the time in office, while the effect on later earnings is small. We also find a relatively weak individual incumbency advantage of 18 percentage points in parliamentary elections; the incumbency effect in municipal elections is negligible. (JEL D72, J45)
We estimate the private returns to being elected to parliament or to a municipal council using a regression discontinuity (RD) design. We first present a bootstrap method for measuring the closeness of elections, which can be applied to any electoral system. We then apply the method to perform a RD estimation in Finland, where seats are assigned according to a proportional open-list system. Becoming a member of parliament increases annual earnings initially by about (sic)20,000, and getting elected to a municipal council by about (sic)1000. Subsequent earnings dynamics reveal that the returns to parliamentarians accrue mainly during the time in office, while the effect on later earnings is small. We also find a relatively weak individual incumbency advantage of 18 percentage points in parliamentary elections; the incumbency effect in municipal elections is negligible. (JEL D72, J45)
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