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

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.