According to a report by the National Bureau of Economic Research (NBER), the stock trading returns of the US congressional leadership can exceed those of ordinary members by up to 47% annually.
The report shows that between 1995 and 2021, a total of 20 such leaders engaged in stock trading before and after promotion. These legislators had lower investment performance than the market before promotion, but the situation suddenly changed after promotion.
The report states, "Importantly, we have observed a significant improvement in the trading performance of legislators as they are promoted to leadership positions, while the performance of matched 'ordinary' legislators has not improved significantly
The reason why the congressional leadership has an advantage in the stock market is partly due to its ability to set regulatory or legislative agendas, such as deciding whether and when a bill will enter the voting process. The power to set agendas also allows leaders to know in advance the timing of certain actions.
In fact, when the political party controls the parliament, the stock trading returns of leaders during this period are significantly higher.
In addition, holding leadership positions has also increased channels for obtaining non-public information. Researchers point out that although companies are generally unwilling to share sensitive internal information, they may be more willing to prioritize disclosing it to leadership rather than ordinary lawmakers.
Leaders receive higher returns from stocks of campaign donating companies or companies headquartered in their own state, which researchers believe may stem from the privilege of obtaining company specific information.

According to a report by the National Bureau of Economic Research (NBER), the stock trading returns of the US congressional leadership can exceed those of ordinary members by up to 47% annually.
The report shows that between 1995 and 2021, a total of 20 such leaders engaged in stock trading before and after promotion. These legislators had lower investment performance than the market before promotion, but the situation suddenly changed after promotion.
The report states, "Importantly, we have observed a significant improvement in the trading performance of legislators as they are promoted to leadership positions, while the performance of matched 'ordinary' legislators has not improved significantly
The reason why the congressional leadership has an advantage in the stock market is partly due to its ability to set regulatory or legislative agendas, such as deciding whether and when a bill will enter the voting process. The power to set agendas also allows leaders to know in advance the timing of certain actions.
In fact, when the political party controls the parliament, the stock trading returns of leaders during this period are significantly higher.
In addition, holding leadership positions has also increased channels for obtaining non-public information. Researchers point out that although companies are generally unwilling to share sensitive internal information, they may be more willing to prioritize disclosing it to leadership rather than ordinary lawmakers.
Leaders receive higher returns from stocks of campaign donating companies or companies headquartered in their own state, which researchers believe may stem from the privilege of obtaining company specific information.