Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. In this paper, we estimate the effect of pay for politicians on who wants to be a politician. We take advantage of a considerable 35 percent salary increase of Finnish MPs in the year 2000, intended to make the pay for parliamentarians more competitive. A differenceindifferences analysis, using candidates in municipal elections as a control group, suggests that the higher salary had the intended effect among women, whether measured by education or occupational qualifications. We also examine cross-party differences.JEL Classification: D72, J3, J45

Abstract:We consider a model with a vertically integrated monopolist network provider who faces rival operators in the retail market. We examine the network operator's incentives to invest in a technology that increases demand. We find that investments are below the social optimum even when there is no regulation, and access price regulation further reduces investment incentives. The underinvestment problem may have negative effects on the viability of competition and in the presence of access price regulation, rivals are most likely to be foreclosed when they would bring highest benefits to consumers.

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 an 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 e20,000, and getting elected to a municipal council by about e1000. 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.

We examine the link between the welfare state and citizens'life satisfaction by using evidence from public health care services. By combining local level data on public health care, and individual level data on life satisfaction, we show that relatively high expenditures in health care have a positive e¤ect on individuals' life satisfaction in our data. We …nd some evidence for an "ends-against-themiddle" equilibrium (Epple and Romano, 1996) in the provision of public health care, where middle-income individuals prefer higher public expenditure than lowincome or high-income individuals. Further, our results indicate that valuation for health care depends on individual political orientation.

We analyse the determination of taxes on harmful goods when consumers have selfcontrol problems. We show that under mild conditions, the socially optimal tax rate exceeds the average distortion caused by self-control problems. Further, we show that in most cases the tax rate chosen in political equilibrium is below the socially optimal level. JEL Classification: H21, H30, D72.