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


Peichl, Andreas ; Pestel, Nico ; Siegloch, Sebastian



URL: http://ftp.iza.org/dp5520.pdf
Additional URL: https://papers.ssrn.com/sol3/papers.cfm?abstract_i...
Document Type: Working paper
Year of publication: 2011
The title of a journal, publication series: IZA Discussion Papers
Volume: 5520
Place of publication: Bonn
Publishing house: Forschungsinstitut zur Zukunft der Arbeit (IZA)
Related URLs: https://ideas.repec.org/p/iza/izadps/dp5520.html
Publication language: English
Institution: School of Law and Economics > VWL, Quantitative Finanzwissenschaft (Peichl 2013-2017)
School of Law and Economics > VWL, Soziale Sicherung (Siegloch 2018-)
Subject: 330 Economics
Classification: JEL: D72 , H11 , H83 , J31 , J45,
Keywords (English): politicians' wage gap , descriptive representation , citizen-candidate model , political rents , outside earnings
Abstract: Using a unique dataset of German members of parliament with information on total earnings including outside income, this paper analyzes the politicians’ wage gap (PWG). After controlling for observable characteristics as well as accounting for selection into politics, we find a positive PWG which is statistically and economically significant. It amounts to 40-60% compared to citizens with an executive position. Hence, we show that the widely held claim that politicians would earn more in the private sector is not confirmed by our data. Our findings are robust with respect to potential unobserved confounders. We further show that the PWG exceeds campaigning costs and cannot be justified by extraordinary workload. Hence, our results suggest that part of the PWG can be interpreted as rent extraction. This calls for a reform of the regulation of outside earnings, which account for a sizeable share of the wage premium.

Dieser Datensatz wurde nicht während einer Tätigkeit an der Universität Mannheim veröffentlicht, dies ist eine Externe Publikation.




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Peichl, Andreas ; Pestel, Nico ; Siegloch, Sebastian (2011) The politicians' wage gap: insights from German members of parliament. IZA Discussion Papers Bonn 5520 [Working paper]


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