Hagen was elected into parliament for seven consecutive four-year periods from 1981 until he stepped down and decided not to run for the 2009 election. In 1979 to 1982, 1987 to 1991 and 1995 to 1999, he was also a member of Oslo's city council. In 2005, Hagen was chosen as Vice President of the Storting, and held the position until he left Storting, in 2009. In 2006, he stepped down as party leader in favour of Siv Jensen. Part of the decision not to run for re-election, which he had made in 2007, apart from reaching the age of pension, was because Hagen had felt that he had been put on the sideline after retiring as party leader. He also said that he wanted more time to relax and to work as a consultant. After ending his high-profile political career, he started working for the public relations agency Burson-Marsteller in 2009, where he became among the company's highest-paid lecturers.