Legislator Compensation and Candidate Quality

What the evidence says

Across a single body of evidence, higher legislator wages are linked to more and better-qualified candidates entering races, and to more and better-qualified legislators being elected. A 50 percent wage increase is associated with 0.72 additional candidates per seat, indicating more people choose to run when the office pays more. That larger candidate pool is also more credentialed: a 50 percent wage increase is linked to 0.31 additional years of average schooling among candidates, a 7.4 percent increase in the share of candidates with at least a high school degree, and a 0.062 increase (16 percent relative to the average) in the share of candidates from white-collar occupations.

These candidate-pool changes carry through to who holds office. A 50 percent wage increase is linked to 0.47 additional years of average schooling among elected legislators and a 10 percent increase in the share of legislators with at least a high school degree, alongside a reported but unquantified increase in the share of legislators from white-collar occupations.

Higher wages are also linked to more legislative activity: a 50 percent wage increase is associated with a 25 percent increase in the number of bills submitted, and a positive relationship with the number of bills approved (magnitude not quantified in the available text). Downstream, the same wage increases are linked to more health clinics and schools and to improved school infrastructure, though the magnitude of that increase is not specified. Not every public-goods outcome moves, however: the evidence finds no measured effect of legislator wages on household access to water and sanitation, an absence that stands alongside the positive results on other public-goods categories.

Wage increases are also linked to political durability among more-qualified legislators. A 50 percent wage increase is associated with a roughly 30 percent increase in reelection rates for legislators with at least a high school education, and a log wage increase is linked to 0.41 additional average terms served.

Every claim above comes from one source (Claudio Ferraz, NBER w14906), so the question of whether "the literature" agrees cannot be answered from what's on this page — there is no second, independent study here to compare against or replicate these magnitudes.

Where the evidence splits

No contradictions in the current sources.

Thresholds and dose-response

No threshold established in the current sources.

Open empirical questions

• Whether the wage effects hold, diminish, or reverse beyond the 50 percent increase studied — no dose-response beyond that magnitude is established.
• Whether the gains in legislator quality and output reflect a selection channel (better candidates choose to run) or an incentive channel (the same candidates perform differently once pay rises) — not distinguished in the claims.
• Why higher wages are linked to increases in health and education infrastructure but not to household water and sanitation access — no mechanism for that divergence is given.
• Whether these effects generalize outside the jurisdiction and period covered by this one source — no independent replication is present in the evidence base.