A Political Economy Model of Congressional Careers

Abstract

Our main goal is to quantify the returns to a career in the United States Congress. We specify a dynamic model of career decisions of a member of Congress and estimate this model using a newly collected dataset. Given estimates of the structural model, we assess reelection probabilities, estimate the effect of congressional experience on private and public sector wages, and quantify the value of a congressional seat. Moreover, we assess how an increase in the congressional wage or the imposition of term limits would affect the career decisions of politicians and the returns from a career in Congress.

Moonlighting Politicians: A Survey and Research Agenda

“…Indeed, lifting the private-public incompatibility-assumption by allowing for MPs' outside income generation or private-sector capitalization of political experience may lead to equilibria with positive sorting where a wage increase reduces average politician quality. The reason is that a pay-increase in such setting makes public office relatively more interesting to low-skilled citizens (e.g., Diermeier et al 2005;Mattozzi and Merlo 2008;Gagliarducci et al 2010;Keane and Merlo 2010).…”

To elect or to appoint? Bias, information, and responsiveness of bureaucrats and politicians

“…8 See Diermeier, Keane, and Merlo (2005) for a similar approach in Congress. 9 Note that this is a surprising finding, given that according to the previous literature, voters are very uninformed about judges' decisions in the vast majority of cases (see Gordon and Huber (2007) and references within, and Bonneau and Hall (2006) and references within).…”

The politicians’ wage gap: insights from German members of parliament

“…23 Another estimation technique to account for unobserved heterogeneity is the application of a fixed-effects regression (see Diermeier et al (2005) for an application to US Congress members). However, this would require a panel dataset of MPs, and we have only data for one legislative period.…”