Legislative Pensions and Re‐election Seeking: Evidence from Canadian Legislatures

Abstract

We use data from Canadian legislatures to examine how legislative pension rules affect the propensity of incumbents to seek re‐election. We predict that legislators with defined‐benefits pensions are more likely to seek re‐election than legislators without pensions. Once the legislator is vested (i.e., qualified) in the pension, however, this incentive disappears; indeed, pensions that accrue value quickly and can be collected at an early age, induce legislators to retire rather than seek re‐election. Difference‐in‐differences estimates bear out these predictions: on average, legislators with defined benefits pensions are 11 percentage points more likely to seek re‐election than legislators without pensions, whereas legislators who on vesting immediately qualify for a pension of 50% of their salary are 11 percentage points less likely to do so. These results show that legislative pensions alter the value that legislators place on re‐election and, in doing so, they affect the accumulation of legislative professionalism and the strength of democratic accountability.