Abstract
This paper studies the impact of politicians' education on policy choices and public finance. A probabilistic voting model with candidates' education level and public expenditure decomposition is used to explain how politician's education matters for policy decisions over public budget allocation. Empirically, I use Italian municipality data on electoral results, balance sheets and mayor candidates' educational attainment from 2000 to 2015. To estimate the causal effect of mayors' education on public finance I rely on regression discontinuity design focusing on close elections. Overall, I find that educated mayors boost public investment, especially in the education sector, without compromising the fiscal stability of the municipalities.
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