Public Choice

, Volume 156, Issue 3, pp 653–676

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

Article

DOI: 10.1007/s11127-012-9921-4

Cite this article as:
Peichl, A., Pestel, N. & Siegloch, S. Public Choice (2013) 156: 653. doi:10.1007/s11127-012-9921-4

Abstract

Using a unique dataset of German members of parliament (MPs), this paper analyzes the politicians’ wage gap (PWG). After controlling for observable characteristics as well as accounting for election probabilities and campaigning costs, we find a positive income premium for MPs which is statistically and economically significant. Our results are consistent with the citizen candidate model, with a PWG of 35%–65% when comparing MPs to citizens occupying executive positions. However, it shrinks to zero when restricting the control group to top level executives.

Keywords

Politicians’ wage gapCitizen candidate modelRemuneration from public officeOutside earnings

Copyright information

© Springer Science+Business Media, LLC 2012

Authors and Affiliations

  • Andreas Peichl
    • 1
    • 2
    • 3
    • 4
  • Nico Pestel
    • 1
    • 2
  • Sebastian Siegloch
    • 1
    • 2
  1. 1.Institute for the Study of Labor (IZA)BonnGermany
  2. 2.University of CologneCologneGermany
  3. 3.ISERColchesterUK
  4. 4.CESifoMunichGermany