An Analysis of Welfare Effects of Legislative Term Limits

Abstract

This paper analyzes the welfare effects of term limits forstate legislators. Legislators tend to pursue their ownobjectives and deviate from the interests of voters as theystay longer in office. However, such long-term incumbentsbecome more productive in transferring wealth to theirconstituents due to seniority they gain, and voters re-electthe incumbent. Term limits reduce the maximum seniority of adistrict's legislator and of other districts' legislators aswell, affecting the relative seniority of the legislator.Thus, the legislator gains relative seniority sometimes andloses other times under term limits. As a consequence, votersof a district may or may not benefit from term limits. Thewelfare effects of term limits depend crucially on the shapeof the voters' utility function.