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.
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