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Title: Wealth Accumulation by U.S. Congressmen, 1845-1875: Were the Civil War Years Exceptional(ly Good)?

Citation Type: Miscellaneous

Publication Year: 2011

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Abstract: In this paper we use historical census data from the U.S. to estimate the pecuniary returns to holding a seat in the U.S. House of Representatives during the 1850s and 1860s. We employ a regression discontinuity design (RDD) based on close elections and compare wealth accumulation in the decades between 1850 and 1870 among those who won or lost their first congressional race by a small margin. We fi nd no evidence of large returns to congressional seats for the 1850s or the second half of the 1860s. However, we do fi nd evidence of signifi cant returns for the first half of the 1860s, during the Civil War. Those who won their fi rst election by a narrow margin and served during the period 1861-1866 (37th-39th Congresses) accumulated, on average, 33-55% more wealth between 1860 and 1870 than candidates who lost the election and did not serve - for the median congressman this corresponds to an additional $700,000-$1,200,000 in present values. We hypothesize that the sudden spike in government spending during the war and the decrease in oversight from government agencies might have made it easier for incumbent congressmen - and probably other politicians - to collect rents. We fi nd evidence that wealth accumulation was particularly large for congressmen who represented states that were home to the major military contractors during the war, and for congressmen who served during the Civil War in committees that were responsible for most military appropriations - the latter accumulated up to 70% more wealth relative to those who never served. These results are robust to the inclusion of state fi xed effects, and to the inclusion of a broad set of controls including age, initial wealth and occupation dummies. Placebo regressions reveal that these results are not driven by pre-existing diff erences in wealth accumulation or other covariates prior to serving in congress. We also show that all of the main results hold when we use the number of domestic servants - a good proxy for wealth - as the dependent variable. Finally, we show that a simple "before-and-after" design using only winning candidates yields surprisingly similar estimates to the RDD.

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Authors: Snyder, James M.; Querubin, Pablo

Publisher: Harvard University

Data Collections: IPUMS USA

Topics: Other

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