Money, Political Ambition, and the Career Decisions of Politicians, Second Version
Michael Keane () and
Antonio Merlo ()
PIER Working Paper Archive from Penn Institute for Economic Research, Department of Economics, University of Pennsylvania
In this paper we assess the impact of a variety of policies that may influence the career decisions of members of the U.S. Congress, using the empirical framework of Diermeier, Keane and Merlo (2005). These policies alter incentives to run for re-election, run for higher office or leave Congress, by altering wages, non-pecuniary rewards and career prospects (both in and out of Congress). We find that reducing the relative wage of politicians would substantially reduce the duration of congressional careers. Notably, however, the effect varies considerably across different types of politicians. A reduction in the congressional wage would disproportionately induce exit from Congress by â€œskilledâ€ politicians, Democrats, and politicians who were relatively young when first elected. Interestingly, however, it would not cause the type of politicians who most value legislative accomplishments (â€œachieversâ€ ) to disproportionately exit Congress. Thus, wage reductions would not reduce the â€œqualityâ€ composition of Congress in this sense. Term limits also have similar effects on achievers and non-achievers. However, we find that term limits would disproportionately induce members of the majority party to exit Congress. This has the interesting implication that term limits make it more difficult to sustain substantial congressional majorities over time. We do find three types of policies that disproportionately induce non-achievers to leave Congress: (i) elimination of seniority as a determinant of key committee assignments, (ii) restricting private sector employment after leaving Congress, and (iii) reducing the seniority advantage in elections.
Keywords: politicians; political careers; monetary and non-monetary incentives; U.S. Congress (search for similar items in EconPapers)
JEL-codes: D72 J44 J45 (search for similar items in EconPapers)
Date: 2007-05-01, Revised 2010-02-01
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Persistent link: https://EconPapers.repec.org/RePEc:pen:papers:10-009
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