A fundamental question in political economy is: What are the returns to an individual from a career in politics? The main goal of this project is to provide at least a partial answer to this fundamental question. To achieve this goal, a dynamic model of career decisions of a member of the U.S. Congress is developed and this model is estimated using a new data set that is being collected. The study of Congressional careers has a long tradition in American politics. However, existing empirical studies of Congressional careers suffer from two main limitations. First, they estimate static models using pooled time series data from the post war U.S. House of Representatives. Second, they ignore the possibility that representatives may decide to leave Congress to pursue alternative professional careers. This research will overcome both these limitations and will provide a new framework for the empirical analysis of Congressional careers. A key innovation of this framework is that the potential career opportunities of politicians outside Congress is modeled explicitly. In particular, it is assumed that when a politician exits from Congress, he or she can choose among a set of employment options, and the wage the politician would receive in each of these options is a function of the politician's age, education, congressional experience , and whether exit is voluntary or a consequence of an electoral defeat. In addition, it is assumed that politicians differ with respect to their ability, which together with their other characteristics affect both their probability of winning an election and their post congressional payoffs. To estimate the model a new data set which is being collected. This data set contains detailed information on complete career histories of approximately 2,000 House and Senate members from the 80th to the 103rd Congress (1947 1994). A novel feature of this data set is that it incorporates information about post congressional employment of former members of Congress and their salaries in these occupations. This crucial piece of information is used to estimate the value of a Congressional career. This framework is also used to sort out the relative importance of two key factors that may induce people to pursue a political career: the utility politicians derive from being in office and the monetary returns to a career in Congress. Finally, the model is used to evaluate the effects of various policy experiments on the value of a Congressional seat and on the career decisions of politicians. Such policies include the introduction of term limits, changes in the pension regime, changes in the wages in Congress, changes in the seniority rule for committee appointments, etc.
