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The long run earnings effects of winning a mayoral election

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  • Brunello, Giorgio
  • Bertoni, Marco
  • De Paola, Maria
  • Cappellari, Lorenzo

Abstract

We combine administrative data on earnings with data on Italian municipal elections from 1993 to 2017 to estimate the causal impact of winning a mayoral election on long-term earnings. Exploiting close contests in candidates’ first mayoral elections, we credibly identify the causal impact of an initial electoral victory on subsequent labor market and political earnings. We find that, over 15 years, winning an election increases the average discounted value of earnings by 6.5 %, a modest return compared to other career options. This positive effect stems mainly from higher political compensations during the first electoral term but is short-lived due to runners-up succeeding in later elections and a two-term limit. While in office, winners face negative impacts on labor and social security earnings, which persist post-mandate especially in Southern Italy, due to challenges in resuming work. We find little support for illegal labor market engagement, and that the negative effects on labor earnings are larger for low-educated, low-earning, and female candidates, contributing to their underrepresentation in politics.

Suggested Citation

  • Brunello, Giorgio & Bertoni, Marco & De Paola, Maria & Cappellari, Lorenzo, 2025. "The long run earnings effects of winning a mayoral election," Journal of Economic Behavior & Organization, Elsevier, vol. 240(C).
    • Handle: RePEc:eee:jeborg:v:240:y:2025:i:c:s0167268125004445
    DOI: 10.1016/j.jebo.2025.107327
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    2. Giommoni, Tommaso, 2024. "A fistful of dollars: Rent seeking behaviour and local tax manipulation," Journal of Economic Behavior & Organization, Elsevier, vol. 220(C), pages 453-469.
    3. Augusto Cerqua & Samuel Nocito & Gabriele Pinto, 2025. "Pay Incentives to Run for Local Governments," CESifo Working Paper Series 11778, CESifo.
    4. Andrea Boitani & Catalin Dragomirescu-Gaina & Andrea Monticini, 2025. "Managing the chaos: policy challenges in a hyperinflationary environment," DISCE - Working Papers del Dipartimento di Economia e Finanza def142, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    5. Simon Luechinger & Mark Schelker & Lukas Schmid, 2025. "Do Firms Hire Politicians as Directors? Evidence from Close Elections," CESifo Working Paper Series 12019, CESifo.
    6. Massimo Bordignon & Davide Cipullo & Gilberto Turati, 2025. "Strategic Bankruptcies. Do Smart Politicians Do It Better?," CESifo Working Paper Series 11930, CESifo.

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    Keywords

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    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets

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