Dynastic Political Rents?
Economic Benefits to Relatives of Top Politicians

by

Olle Folke, Torsten Persson and Johanna Rickne

Abstract

We exploit close elections between the right and left bloc in Swedish municipalities to test whether children or siblings of politicians who enter into a top executive position obtain economic benefits. On a restricted sample of relatives who live in the same municipality as their top-politician relative, we find no benefits for the siblings of leading politicians, but sizeable income gains for children: a parent appointed to the top political executive raises children's average earnings by about 15 percent. These higher incomes accrue to children at the lower end of the earnings distribution and amount to an average of 10 percent of a full-time median wage. Exploiting administrative information on the children's occupational and residence status, we find that the higher earnings are unlikely to be rooted in an illegitimate allocation of jobs. But there is suggestive evidence that children of parents who win an election are more likely to postpone the start of their tertiary education and instead remain in the municipality to work.