In Salaries and Work Effort: An Analysis of the European Union Parliamentarians [PDF], a paper by professors Naci Mocan and Duha Altindag in the latest Economics Journal, the researchers take advantage of a recent change in the pay of Members of the European Parliament to examine the relationship between pay and work.
Until 2009, each EU nation chose how much to pay its MEPs, and salaries were highly variant. When they were harmonized in 2009, some MEPs got paycuts, other got raises. The researchers examined MEPs' behavior before and after, and concluded that the MEPs who got raises did less work (attending meetings and sessions) than they had under lower salary conditions; while MEPs who took cuts started showing up for work more.
The UK just gave massive, above-inflation raises to its MPs, and part of the argument was that you have to pay for quality. That proposition does not appear to accord with the data.
The unique event allowed the economists to compare the effects of pay rises and decreases on MEPs' performances between July 2004 and December 2011. From this they drew a startling conclusion: MEPs who got an increase ended up attending fewer meetings, while those who had a pay cut raised their attendance rate. Each percentage increase in salary resulted in a decrease of around 0.04% in the number of days an MEP attended parliament. For example, the average French MEP, whose salary increased from about €76,000 to €92,000, ended up missing an additional parliamentary meeting a year.
"We find that a decrease in salaries motivates parliamentarians to increase their attendance," the economists write. The increase in salary also had a negative impact on the number of written or oral questions asked by parliamentarians.
"European parliamentarians are responsible for passing laws that govern the member countries," the two academics write. "They have control over the EU budget and they supervise the other EU institutions. So given the significance of the job, it might be presumed that the effort MEPs put into their work would not be influenced by their salary. The results of our analysis show that this is not the case."
Paying politicians too much harms their work ethic, study claims
[Jamie Doward/The Guardian]