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Are Bureaucrats Really Paid Like Bureaucrats?

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  • Ruben Enikolopov

    ()
    (The New Economic School)

Abstract

Traditionally, bureaucrats have been viewed as a stereotypical example of employees with flat pay schedules and low-powered incentive schemes. This paper challenges that view by providing evidence that the wages of a particular group of senior bureaucrats - city managers - are tightly connected to their performance as measured by city growth. Additional tests indicate that these results reflect reward for performance, rather than rent extraction, as exogenous shocks to city growth do not affect city managers’ wage. First, I show that the salaries of city managers do not react to observable exogenous shocks to city performance. Next, I demonstrate that performance affects city managers’ wages not only in the city in which they are currently employed, but also in the city in which they work afterwards. Finally, I find that in cities with council-manager forms of government, the wages of mayors - who do not play important roles in running the cities with council-manager form of government - are not sensitive to city performance.

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Bibliographic Info

Paper provided by Center for Economic and Financial Research (CEFIR) in its series Working Papers with number w0165.

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Length: 33 pages
Date of creation: Aug 2011
Date of revision:
Handle: RePEc:cfr:cefirw:w0165

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  1. Timothy Besley & A. Abigail Payne, 2005. "Implementation of anti-discrimination policy: does judicial selection matter?," LSE Research Online Documents on Economics 3768, London School of Economics and Political Science, LSE Library.
  2. Alesina, Alberto & Tabellini, Guido, 2008. "Bureaucrats or politicians? Part II: Multiple policy tasks," Journal of Public Economics, Elsevier, vol. 92(3-4), pages 426-447, April.
  3. Ruben Enikolopov, 2010. "Politicians, Bureaucrats and Targeted Redistribution: The Role of Career Concerns," Working Papers w0148, Center for Economic and Financial Research (CEFIR).
  4. Alberto Alesina & Guido Tabellini, 2007. "Bureaucrats or Politicians? Part I: A Single Policy Task," Levine's Working Paper Archive 321307000000000870, David K. Levine.
  5. Daniel Diermeier & Michael Keane & Antonio Merlo, 2004. "A Political Economy Model of Congressional Careers: Supplementary Materiel," PIER Working Paper Archive 04-038, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
  6. Stephen Coate & Brian Knight, 2009. "Government Form and Public Spending: Theory and Evidence from U.S. Municipalities," NBER Working Papers 14857, National Bureau of Economic Research, Inc.
  7. Daniel Diermeier & Michael Keane & Antonio Merlo, 2002. "A Political Economy Model of Congressional Careers," PIER Working Paper Archive 04-037, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 01 Sep 2004.
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