Do newly elected mayors cut their own pay?

Using data from the 2023 Spanish municipal elections, we show that newly elected mayors who replace incumbents from a different ideological bloc reduce their own pay upon taking office — by about 6 and 13 percentage points of the legal maximum in left-to-right and right-to-left turnovers, respectively — relative to reelected incumbents. No such adjustment occurs when the incoming mayor shares the predecessor’s ideological orientation. The pattern of results is consistent with a costly-signaling mechanism in which ideological outsiders use early pay cuts to credibly convey otherwise hard-to-observe attributes. More broadly, the findings suggest a previously unexplored way in which electoral turnover may shape local political behavior. • Major pay adjustments occur immediately when electoral turnover takes place. • Pay cuts follow a pattern consistent with costly signaling. • Newly elected mayors reduce their pay when an ideological turnover occurs. • No pay cuts occur when incoming and outgoing mayors share ideology.