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We study the harmonization of the base pay for the Members of the European Parliament (MEPs). Prior to this reform, implemented in 2009, base pay was aligned with that of national parliamentarians, causing large differences in pay between the MEPs representing 27 member states. Based on detailed information on individual MEPs between 2004 and 2011, we find that the reform, which introduced an exceptional base pay increase of 200 % per national delegation on average, has a positive incentive effect on in-office effort proxied by the number of speeches, written declarations and reports drafted. However, more generous remuneration is associated with higher rates of absenteeism. With respect to political selection, we find that higher pay also raises reelection rates. The composition of the pool of MEPs in terms of (ex-ante) quality approximated by formal education, previous political experience in elected office and occupational background is, however, unaffected. If we restrict our attention to newly elected MEPs, a salary increase is related to fewer MEPs with previous political experience at the highest national level.
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- Does remuneration affect the discipline and the selection of politicians? Evidence from pay harmonization in the European Parliament
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