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Dec 9, 2025
Lawmakers get nearly 50% stock-picking boost after joining leadership, study finds - Conservative Angle
Lawmakers get nearly 50% stock-picking boost after joining leadership, study finds - Conservative Angle
Brigitte Gabriel
Members of congressional leadership far outperform other lawmakers in picking stocks, according to new research that could boost efforts to curb stock trading on Capitol Hill.
The research, circulated this week by the National Bureau of Economic Research, used transaction-level data to track the stock trades of members. It found that lawmakers outperform their peers by a whopping 47% annually after entering leadership.
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The authors of the study, Shang-Jin Wei of Columbia University and NBER, and Yifan Zhou of Xi'an Jiaotong-Liverpool University, surmise that congressional leaders are able to garner outsize returns through their sway in Congress and their connections to businesses, which they term, respectively, the political influence channel and the corporate access channel.
"The political influence channel is reflected in higher returns when their party controls the chamber, sales of stocks preceding regulatory actions, and purchase of stocks whose firms receiving more government contracts and favorable party support on bills," the study reads.
Meanwhile, the researchers found that the corporate access channel is reflected in trades that "predict subsequent corporate news and greater returns on donor-owned or home-state firms."
Wei pointed out during an interview with the Washington Examiner that another key aspect of the research is that it controls for peer comparisons. Essentially, the research indicates that those making big gains in leadership were basically getting the same returns as their peers before entering into leadership.
Wei noted that it is important because the argument could be made that those members in leadership who make outsize returns on trades tend to be smarter or savvier, which could also be why they ended up in leadership to begin with.
"So the same people, before they became leaders, they didn't do very well. They did essentially the same as other me
