13:15 - 15:30
Thursday-Panel
Chair/s:
Sebastian Koehler
Discussant/s:
Despina Alexiadou
Meeting Room A

Jens Olav Dahlgaard, Nicolai Kristensen, Frederik Kjøller Larsen
Reward or Punishment? Estimating the Distribution of Long-Run Returns to Political Office

Frederik Kjøller Larsen
Returns to office among political amateurs

Jens Wäckerle, Bruno Castanho Silva, Danielle Pullan
Who Sits Where? The Parliamentary Power Index and Committee Membership in 19 Countries

Adam Scharpf, Christian Glaessel
Who Participates in Military Coups? Evidence from Argentina

 
Reward or Punishment? Estimating the Distribution of Long-Run Returns to Political Office
Jens Olav Dahlgaard 1, 2, Nicolai Kristensen 3, 4, Frederik Kjøller Larsen 5
1 King's College London
2 Copenhagen Business School
3 VIVE, The Danish Center for Social Science Research
4 IZA Institute for Labor
5 University of Copenhagen

What are the returns to a political career? Conditional on running for office, empirical studies have unilaterally found positive average returns to being elected for political office. In this study, we address three shortcomings. First, returns to office are likely heterogeneous where some Members of Parliament may experience negative or no returns although the average effect is positive. Second, the timing of returns can deviate e.g. due to lucrative pension schemes for politicians or future career options. Therefore, we take into account the net present value of life cycle income in order to account for income received after leaving office. Third, previous research has usually identified the returns to office conditional on running by comparing election winners to election losers, which ignores the investments candidates make in order to run for office. Based on administrative data for all candidates for parliamentary elections in Denmark from 1994 to 2015, we compare close winners and losers to find large positive returns to office conditional on running. However, quantile difference-in-difference estimates of returns to office reveals that those with high outside earning potential have no returns to office. Taking the value of long-run returns into account, holding office becomes even more lucrative. To identify the returns to choosing a political career, we use coarsened exact matching to find close matches in the population for each politician. We use a difference-in-difference strategy where we compare those who run for office to their population matches to identify the unconditional returns to a political career.