Returns to Office in National and Local Politics: A Bootstrap Method and Evidence from Finland

Kaisa Kotakorpi, Panu Poutvaara and Marko Terviö

The Journal of Law, Economics, and Organization, 2017, vol. 33, issue 3, 413-442

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 €20,000, and getting elected to a municipal council by about €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-codes: D72 J45 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (40)

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