Who benefits from the revolving door? Evidence from Japan

A growing literature finds high returns to firms connected to legislative office. Less attention has been paid to benefits from bureaucratic connections and to organizations beyond for-profit firms. Using new data recording the first post-bureaucracy position occupied by all former civil servants in Japan, I reveal a bifurcated job market in which the highest ranking civil servants from the most prestigious ministries retire into for-profit firms while others join non-profit and public organizations. I show that for-profit firms receive larger government loans and stock price boosts following bureaucratic hires, and that these effects are driven by hires from prestigious economic ministries. I also show that non-profits leverage their bureaucratic hires by receiving higher value contracts in periods when former officials are in director positions at the organization. While top civil servants are therefore of value to for-profit firms, others find post-bureaucracy employment in non-profits supported by government funding.