IZA DP No. 4235: Pay for Politicians and Candidate Selection: An Empirical Analysis
published in: Journal of Public Economics, 2011, 95 (7-8), 877 - 885
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 difference-indifferences 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.