There is a significant link between how much members of the European Parliament (MEPs) are paid and the work effort they put in, according to research by Professors Naci Mocan and Duha Altindag, published in the December 2013 issue of the Economic Journal.
Their study finds that after a change in the salary structure of the European Parliament in 2009, MEPs who experienced an increase in salary attended fewer meetings, while those who experienced a pay cut raised their attendance rate.
The 2009 change in the salary structure provides a natural experiment in which to quantify the responsiveness of parliamentarians'' performance to their salaries. Prior to July 2009, MEPs received salaries determined by their home country. As a result, there was substantial variation across countries. For example, the salary of a member from Poland was €29,043, whereas the salary of a member from Italy was €142,512.
Starting from the summer of 2009, MEPs'' salaries were equalised to €91,983 and they were paid from the European Union (EU) budget. Because of this new salary structure, MEPs from Austria, Ireland and Italy experienced salary decreases, while all other MEPs had their salaries increased.
The researchers investigate the link between MEPs'' salaries and their work effort over the period from July 2004 to December 2011. Among the findings:
· A 1% increase in salaries of an MEP leads to a decrease of around 0.04% in the number of days they attend the parliament.
· For example, the increase in salary from about €76,000 to €92,000 for MEPs representing France prompted an MEP to miss about one additional meeting in the parliament every year in the seventh term (post-July 2009).
· An increase in salary has a negative impact only on the number of written or oral questions asked by parliamentarians, but salaries are not related to other job-related activities.
· MEPs'' age has a non-linear impact on their attendance, with attendance peaking at about age 52.
· Parliamentarians representing lower-income countries have a reduced propensity to attend sessions.
· Neither sex nor educational attainment of MEPs has an influence on their parliamentary efforts.
· Longer tenure of MEPs increases their attendance.
· A better attendance record from an MEP''s political group prompts that MEP to attend more sessions.
· Parliamentarians who are elected for their first term are about six percentage points more likely to skip a particular plenary session of the parliament if a national holiday in their home country overlaps with that parliamentary session.
· For example, MEPs representing Austria, which celebrates its National Day on 26 October, were less likely to travel to Brussels to attend plenary sessions taking place between 24 and 27 October 2011. Similarly, Hungarian MEPs were less likely to show up for the plenary session spanning the period between 12 and 15 March 2007, which overlaps with Hungary''s ''1848 Revolution Day''.
The researchers note that MEPs are entitled to their fixed salaries regardless of their legislative output or attendance at parliamentary sessions. This particular salary structure, coupled with the perceived lack of effort on the part of parliamentarians and the fact that in many countries parliamentary salaries are significantly higher than average incomes, has long been a source of criticism.
The authors comment:
''European parliamentarians are responsible for passing laws that govern the member countries; 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 and that salaries have a significant impact on work effort.''
''Salaries and Work Effort: An Analysis of the European Union Parliamentarians'' by Naci Mocan and Duha Altindag is published in the December 2013 issue of the Economic Journal. Naci Mocan is at Louisiana State University. Duha Altindag is at Auburn University.
