Campaigning for retirement: State teacher union campaign contributions and pension generosity

Since Tullock (1972) first asked why there is so little money in U.S. politics, several studies have found evidence that political activism has the potential to yield significant returns. This study is the first to directly investigate the returns to public sector union activism by leveraging a transactions-level dataset from the National Institute on Money in Politics to estimate the relationship between teachers' union campaign contributions and the generosity of teacher pension systems. Our results show that more politically engaged teachers’ unions, as evidenced by their aggregate campaign contributions, are successful at both securing a higher level of retirement benefits and at shifting a greater burden of the financing of those benefits to the sponsoring government. Our estimates are in line with recent related studies and imply an investment return on campaign contributions of nearly 1500%. •We estimate campaign contribution returns to public sector union activism.•Focus on the level and state-financed share of teacher pension benefits.•We use an instrumental variables strategy for empirical identification.•Stronger unions are found to have more generous pensions along both margins.•Our estimates imply a return on campaign contributions of nearly 1500%.