The Impact of an Unexpected Wage Cut on Corruption: Evidence from a “Xeroxed” Exam
AbstractThis paper aims to understand how corruption responds to financial incentives and, in particular, it is an attempt to identify the causal impact of a wage loss on the prevalence of corruption in the education sector. Specifically, we exploit the unexpected wage cut in May 2010 that affected all Romanian public sector employees, including the public education staff, and examine its effect on students’ scores on the high-stakes national exam which occurs at the end of high school—the Baccalaureate. To exploit the effect of an income shock on corruption, we use a difference-in-difference strategy and compare the change in the exam outcomes between the public schools—the treatment group—and the private schools—the control group, which were unaffected by the wage cut. Our findings suggest that the wage loss led the public schools to have better exam outcomes than the private schools in 2010 relative to 2009. We attribute this difference to the increased involvement in corrupt activities by public school staff, which was driven by financial incentives. These results match an unprecedentedly high number of allegations of fraud and bribery against school principals, which earned the 2010 Baccalaureate the title of the Xeroxed exam—akin to identical test answers found to have been distributed to numerous students.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Uppsala University, Department of Economics in its series Working Paper Series, Center for Labor Studies with number 2012:14.
Length: 36 pages
Date of creation: 13 Jun 2012
Date of revision:
Contact details of provider:
Postal: Department of Economics, Uppsala University, P. O. Box 513, SE-751 20 Uppsala, Sweden
Phone: + 46 18 471 25 00
Fax: + 46 18 471 14 78
Web page: http://www.nek.uu.se/
More information through EDIRC
School principals; Bribes; High-stakes tests;
Other versions of this item:
- Oana Borcan & Mikael Lindahl & Andreea Mitrut, 2012. "The Impact of an Unexpected Wage Cut on Corruption: Evidence from a "Xeroxed" Exam," CESifo Working Paper Series 4038, CESifo Group Munich.
- Borcan, Oana & Lindahl, Mikael & Mitrut, Andreea, 2012. "The Impact of an Unexpected Wage Cut on Corruption: Evidence from a "Xeroxed" Exam," IZA Discussion Papers 6646, Institute for the Study of Labor (IZA).
- Borcan, Oana & Lindahl, Mikael & Mitrut, Andreea, 2012. "The Impact of an Unexpected Wage Cut on Corruption: Evidence from a "Xeroxed" Exam," Working Papers in Economics 535, University of Gothenburg, Department of Economics.
- H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
- I20 - Health, Education, and Welfare - - Education - - - General
- J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-06-25 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Barr, Abigail & Lindelow, Magnus & Serneels, Pieter, 2009. "Corruption in public service delivery: An experimental analysis," Journal of Economic Behavior & Organization, Elsevier, vol. 72(1), pages 225-239, October.
- Timothy G. Conley & Christopher R. Taber, 2011.
"Inference with "Difference in Differences" with a Small Number of Policy Changes,"
The Review of Economics and Statistics,
MIT Press, vol. 93(1), pages 113-125, February.
- Timothy Conley & Christopher Taber, 2005. "Inference with "Difference in Differences" with a Small Number of Policy Changes," NBER Technical Working Papers 0312, National Bureau of Economic Research, Inc.
- Abigail Barr & Danila Serra, 2009.
"The effects of externalities and framing on bribery in a petty corruption experiment,"
Springer, vol. 12(4), pages 488-503, December.
- Abigail Barr & Danila Serra, 2008. "The effects of externalities and framing on bribery in a petty corruption experiment," CSAE Working Paper Series 2008-24, Centre for the Study of African Economies, University of Oxford.
- Esther Duflo & Rema Hanna & Stephen P. Ryan, 2012. "Incentives Work: Getting Teachers to Come to School," American Economic Review, American Economic Association, vol. 102(4), pages 1241-78, June.
- Frank, Bjorn & Schulze, Gunther G., 2000. "Does economics make citizens corrupt?," Journal of Economic Behavior & Organization, Elsevier, vol. 43(1), pages 101-113, September.
- Fisman, Raymond & Gatti, Roberta, 2002.
"Decentralization and corruption: evidence across countries,"
Journal of Public Economics,
Elsevier, vol. 83(3), pages 325-345, March.
- Fisman, Raymond & Gatti, Roberta, 2000. "Decentralization and corruption - evidence across countries," Policy Research Working Paper Series 2290, The World Bank.
- Gary S. Becker & George J. Stigler, 1974. "Law Enforcement, Malfeasance, and Compensation of Enforcers," The Journal of Legal Studies, University of Chicago Press, vol. 3(1), pages 1-18, January.
- Ferraz, Claudio & Finan, Frederico & Moreira, Diana B., 2012. "Corrupting learning," Journal of Public Economics, Elsevier, vol. 96(9-10), pages 712-726.
- Cristian Pop-Eleches & Miguel Urquiola, 2011. "Going to a Better School: Effects and Behavioral Responses," NBER Working Papers 16886, National Bureau of Economic Research, Inc.
- Benjamin A. Olken, 2007. "Monitoring Corruption: Evidence from a Field Experiment in Indonesia," Journal of Political Economy, University of Chicago Press, vol. 115, pages 200-249.
- Di Tella, Rafael & Schargrodsky, Ernesto, 2003. "The Role of Wages and Auditing during a Crackdown on Corruption in the City of Buenos Aires," Journal of Law and Economics, University of Chicago Press, vol. 46(1), pages 269-92, April.
- Schulze, Günther G. & Frank, Björn, 2000.
"Deterrence versus intrinsic motivation: Experimental evidence on the determinants of corruptility,"
Discussion Papers, Series 1
303, University of Konstanz, Department of Economics.
- Günther G. Schulze & Björn Frank, 2003. "Deterrence versus intrinsic motivation: Experimental evidence on the determinants of corruptibility," Economics of Governance, Springer, vol. 4(2), pages 143-160, 08.
- Bjorn Frank & Guenther G. Schulze, 2000. "Deterrence versus Intrinsic Motivation: Experimental Evidence on the Determinants of Corruptibility," Econometric Society World Congress 2000 Contributed Papers 0950, Econometric Society.
- International Monetary Fund, 1997. "Corruption and the Rate of Temptation - Do Low Wages in the Civil Service Cause Corruption?," IMF Working Papers 97/73, International Monetary Fund.
- Van Rijckeghem, Caroline & Weder, Beatrice, 2001. "Bureaucratic corruption and the rate of temptation: do wages in the civil service affect corruption, and by how much?," Journal of Development Economics, Elsevier, vol. 65(2), pages 307-331, August.
- Armantier, Olivier & Boly, Amadou, 2011. "A controlled field experiment on corruption," European Economic Review, Elsevier, vol. 55(8), pages 1072-1082.
- Ritva Reinikka & Jakob Svensson, 2005. "Fighting Corruption to Improve Schooling: Evidence from a Newspaper Campaign in Uganda," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 259-267, 04/05.
- Ritva Reinikka & Jakob Svensson, 2004. "Local Capture: Evidence From a Central Government Transfer Program in Uganda," The Quarterly Journal of Economics, MIT Press, vol. 119(2), pages 678-704, May.
- Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-44, June.
- Gorodnichenko, Yuriy & Sabirianova, Klara, 2006.
"Public Sector Pay and Corruption: Measuring Bribery from Micro Data,"
CEPR Discussion Papers
5585, C.E.P.R. Discussion Papers.
- Gorodnichenko, Yuriy & Sabirianova Peter, Klara, 2007. "Public sector pay and corruption: Measuring bribery from micro data," Journal of Public Economics, Elsevier, vol. 91(5-6), pages 963-991, June.
- Gorodnichenko, Yuriy & Peter, Klara Sabirianova, 2006. "Public Sector Pay and Corruption: Measuring Bribery from Micro Data," IZA Discussion Papers 1987, Institute for the Study of Labor (IZA).
- Klaus Abbink, 2000. "Fair Salaries and the Moral Costs of Corruption," Bonn Econ Discussion Papers bgse1_2000, University of Bonn, Germany.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Corruption and wages of public officials
by Economic Logician in Economic Logic on 2012-07-12 14:15:00
- Reducerea cu 25% a salariilor ?i notele de la Bac
by Alina Botezat in Alina Botezat Blog on 2012-10-09 11:47:00
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Katarina Grönvall).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.