Titelaufnahme

Titel
Does it matter how and how much politicians are paid? / Duha T. Altindag (Auburn University), S. Elif Filiz (University of Southern Mississippi), Erdal Tekin (American University, IZA, and NBER) ; IZA Institute of Labor Economics
VerfasserAltindag, Duha Tore In der Gemeinsamen Normdatei der DNB nachschlagen ; Filiz, S. Elif In der Gemeinsamen Normdatei der DNB nachschlagen ; Tekin, Erdal In der Gemeinsamen Normdatei der DNB nachschlagen
KörperschaftForschungsinstitut zur Zukunft der Arbeit In der Gemeinsamen Normdatei der DNB nachschlagen
ErschienenBonn, Germany : IZA Institute of Labor Economics, July 2017
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Elektronische Ressource
Umfang1 Online-Ressource (52 Seiten) : Diagramme
SerieDiscussion paper ; no. 10923
URNurn:nbn:de:hbz:5:2-135905 Persistent Identifier (URN)
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Does it matter how and how much politicians are paid? [0.79 mb]
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Zusammenfassung

An important question in representative democracies is how to ensure that politicians behave in the best interest of citizens rather than their own private interests. Aside from elections, one of the few institutional devices available to regulate the actions of politicians is their pay structure. In this paper, we provide fresh insights into the impact of politician salaries on their performance using a unique law change implemented in 2012 in Turkey. Specifically, the members of the parliament (MPs) in Turkey who are retired from their prepolitical career jobs earn a pension bonus on top of their MP salaries. The law change in 2012 significantly increased the pension bonus by pegging it to 18 percent of the salary of the President of Turkey, while keeping the salaries of non-retired MPs unchanged. By exploiting the variation in total salaries caused by the new law in a difference-in-differences framework, we find that the salary increase had a negative impact on the performance of the retired MPs. In particular, the overall performance of these MPs was lowered by 12.3 percent of a standard deviation as a result of the increase in salary caused by the new law. This finding is robust to numerous specification tests. Furthermore, the results obtained from an auxiliary analysis suggest that one of the mechanisms through which MPs reduce their performance is through absenteeism.