Parliamentary Positions and Politicians’ Private Sector Earnings : Evidence from the UK House of Commons

Abstract

Most democracies allow their members of parliament to concurrently be employed in the private sector. A widespread worry is that politicians leverage their current or past posts within parliament, for example, as ministers or committee chairs, to gain lucrative jobs. However, we know little about whether “moonlighting” income is indeed driven by these positions. I analyze comprehensive new panel data on the private sector earnings of all members of the UK House of Commons during 2010–16. Focusing on within-legislator variation, I find that currently holding an influential position does not cause an increase in income from outside jobs. Politicians do see higher earnings soon after leaving their parliamentary posts, but this effect is concentrated among cabinet ministers. The article advances the literature by identifying which political posts lead to financial benefits in the private sector—and when.