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Measuring Rents from Public Employment: Regression Discontinuity Evidence from Kenya - Working Paper 457

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  • Nicholas Barton
  • Tessa Bold
  • Justin Sandefur

    (Center for Global Development)

Abstract

Public employees in many developing economies earn much higher wages than similar private-sector workers. These wage premia may reflect an efficient return to effort or unobserved skills, or an inefficient rent causing labor misallocation. To distinguish these explanations, we exploit the Kenyan government’s algorithm for hiring eighteen-thousand new teachers in 2010 in a regression discontinuity design. Fuzzy regression discontinuity estimates yield a civil-service wage premium of over 100 percent (not attributable to observed or unobserved skills), but no effect on motivation, suggesting rent-sharing as the most plausible explanation for the wage premium.

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  • Nicholas Barton & Tessa Bold & Justin Sandefur, 2017. "Measuring Rents from Public Employment: Regression Discontinuity Evidence from Kenya - Working Paper 457," Working Papers 457, Center for Global Development.
    • Handle: RePEc:cgd:wpaper:457
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    3. Tessa Bold & Deon Filmer & Gayle Martin & Ezequiel Molina & Brian Stacy & Christophe Rockmore & Jakob Svensson & Waly Wane, 2017. "Enrollment without Learning: Teacher Effort, Knowledge, and Skill in Primary Schools in Africa," Journal of Economic Perspectives, American Economic Association, vol. 31(4), pages 185-204, Fall.
    4. Rafael Serrano-Quintero, 2023. "Structural transformation in India: The Role of the Service Sector," UB School of Economics Working Papers 2023/451, University of Barcelona School of Economics.
    5. Chudgar, Amita & Sakamoto, Jutaro, 2021. "Similar work, different pay? Private school teacher working conditions in India," International Journal of Educational Development, Elsevier, vol. 86(C).

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    More about this item

    Keywords

    civil servants; teachers; public sector wages; wage gap; motivation;
    All these keywords.

    JEL classification:

    • H1 - Public Economics - - Structure and Scope of Government
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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