Pay Incentives to Run for Local Governments

Local governments in advanced democracies have increasingly struggled to attract political candidates, weakening electoral competition and accountability at the municipal level. While several factors may contribute to this trend, politicians' salaries represent one of the few policy levers that can be directly adjusted by policymakers. We study a large-scale reform that substantially increased local politicians' pay, exploiting quasi-experimental variation in election timing across municipalities. We find that higher salaries increase political entry, particularly among first-time candidates. Importantly, effects are heterogeneous across local contexts: in less affluent municipalities and in areas with lower entry barriers, higher pay also raises female candidacies and their probability of election. In the poorest areas, the reform further alters the composition of local political elites, shifting recruitment toward candidates with different educational and occupational backgrounds.