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You get what you pay for: Incentives and Selection in the Education System

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Author Info

  • Dohmen Thomas
  • Falk Armin

    (METEOR)

Abstract

We analyse worker self-selection with a special focus on teachers. The point of the paper is that worker composition is generally endogenous, due to worker selfselection. In a first step we analyse lab experimental data to provide causal evidence on particular sorting patterns. This evidence sets the stage for our field data analysis, which focuses specifically on selection patterns of teachers. We find that teachers are more risk averse than employees in other professions, which indicates that relatively risk averse individuals sort into teaching occupations under the current system. Using survey measures on trust and reciprocity we also find that teachers trust more and are less negatively reciprocal than other employees. Finally, we establish differences in personality based on the Big Five concept.

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Bibliographic Info

Paper provided by Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR) in its series Research Memorandum with number 011.

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Date of creation: 2010
Date of revision:
Handle: RePEc:unm:umamet:2010011

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Postal: P.O. Box 616, 6200 MD Maastricht
Phone: +31 (0)43 38 83 830
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Web page: http://www.maastrichtuniversity.nl/
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Related research

Keywords: labour organization;

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References

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  1. Grund, Christian & Sliwka, Dirk, 2002. "Envy and Compassion in Tournaments," IZA Discussion Papers 647, Institute for the Study of Labor (IZA).
  2. Fehr, Ernst & Falk, Armin, 2002. "Psychological Foundations of Incentives," IZA Discussion Papers 507, Institute for the Study of Labor (IZA).
  3. Borghans, Lex & Duckworth, Angela Lee & Heckman, James J. & Weel, Bas ter, 2008. "The Economics and Psychology of Personality Traits," MERIT Working Papers 010, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  4. Dohmen, Thomas J & Falk, Armin & Huffman, David & Sunde, Uwe, 2008. "The Intergenerational Transmission of Risk and Trust Attitudes," CEPR Discussion Papers 6844, C.E.P.R. Discussion Papers.
  5. Dohmen Thomas & Falk Armin, 2010. "Performance Pay and Multi-dimensional Sorting - Productivity, Preferences and Gender," ROA Research Memorandum 003, Maastricht University, Research Centre for Education and the Labour Market (ROA).
  6. Card, David, 1999. "The causal effect of education on earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 30, pages 1801-1863 Elsevier.
  7. Bonin, Holger & Dohmen, Thomas & Falk, Armin & Huffman, David & Sunde, Uwe, 2007. "Cross-sectional earnings risk and occupational sorting: The role of risk attitudes," Labour Economics, Elsevier, vol. 14(6), pages 926-937, December.
  8. J. Dominitz & C. F. Manski, . "Eliciting student expectations of the returns to schooling," Institute for Research on Poverty Discussion Papers 1049-94, University of Wisconsin Institute for Research on Poverty.
  9. Joop Hartog & Luis Díaz-Serrano, 2007. "Earnings risk and demand for higher education: A cross-section test for Spain," Journal of Applied Economics, Universidad del CEMA, vol. 0, pages 1-28, May.
  10. Jacob Mincer, 1958. "Investment in Human Capital and Personal Income Distribution," Journal of Political Economy, University of Chicago Press, vol. 66, pages 281.
  11. Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde, 2008. "Representative Trust And Reciprocity: Prevalence And Determinants," Economic Inquiry, Western Economic Association International, vol. 46(1), pages 84-90, 01.
  12. Dohmen, Thomas J. & Falk, Armin & Huffman, David & Sunde, Uwe, 2009. "Homo Reciprocans: Survey Evidence on Behavioural Outcomes," Munich Reprints in Economics 20055, University of Munich, Department of Economics.
  13. Lalith Munasinghe & Nachum Sicherman, 2006. "Why Do Dancers Smoke? Smoking, Time Preference, and Wage Dynamics," Eastern Economic Journal, Eastern Economic Association, vol. 32(4), pages 595-616, Fall.
  14. Levhari, David & Weiss, Yoram, 1974. "The Effect of Risk on the Investment in Human Capital," American Economic Review, American Economic Association, vol. 64(6), pages 950-63, December.
  15. Hause, John C, 1974. "The Risk Element in Occupational and Educational Choices: Comment," Journal of Political Economy, University of Chicago Press, vol. 82(4), pages 803-07, July/Aug..
  16. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1.
  17. Yoram Ben-Porath, 1967. "The Production of Human Capital and the Life Cycle of Earnings," Journal of Political Economy, University of Chicago Press, vol. 75, pages 352.
  18. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters, in: Schooling, Experience, and Earnings, pages 1-4 National Bureau of Economic Research, Inc.
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Citations

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Cited by:
  1. Margaretha Buurman & Robert Dur & Seth Van den Bossche, 2009. "Public Sector Employees: Risk Averse and Altruistic?," Tinbergen Institute Discussion Papers 09-067/1, Tinbergen Institute.
  2. Wößmann, Ludger, 2011. "Cross-country evidence on teacher performance pay," Munich Reprints in Economics 19679, University of Munich, Department of Economics.
  3. Abeler, Johannes & Nosenzo, Daniele, 2013. "Self-Selection into Economics Experiments Is Driven by Monetary Rewards," IZA Discussion Papers 7374, Institute for the Study of Labor (IZA).
  4. Robert Dur & Robin Zoutenbier, 2012. "Intrinsic Motivations of Public Sector Employees: Evidence for Germany," Tinbergen Institute Discussion Papers 12-135/VII, Tinbergen Institute, revised 02 Jun 2014.
  5. Robert Dur & Robin Zoutenbier, 2012. "Intrinsic Motivations of Public Sector Employees: Evidence for Germany," Tinbergen Institute Discussion Papers 12-135/VII, Tinbergen Institute, revised 02 Jun 2014.
  6. Tonin, Mirco & Vlassopoulos, Michael, 2014. "Are Public Sector Workers Different? Cross-European Evidence from Elderly Workers and Retirees," IZA Discussion Papers 8238, Institute for the Study of Labor (IZA).
  7. Daniel Pollmann & Thomas Dohmen & Franz Palm, 2013. "Robust Estimation of Wage Dispersion with Censored Data: An Application to Occupational Earnings Risk and Risk Attitudes," SOEPpapers on Multidisciplinary Panel Data Research 572, DIW Berlin, The German Socio-Economic Panel (SOEP).
  8. Riener, Gerhard & Wiederhold, Simon, 2012. "Team building and hidden costs of control," DICE Discussion Papers 66, Heinrich‐Heine‐Universität Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
  9. Wiederhold, Simon & Riener, Gerhard, 2012. "Hidden Costs of Control in Social Groups," Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 65407, Verein für Socialpolitik / German Economic Association.
  10. Christoph Helbach, 2012. "The Interplay of Standardized Tests and Incentives – An Econometric Analysis with Data from PISA 2000 and PISA 2009," Ruhr Economic Papers 0356, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  11. Brice Corgnet & Roberto Hernán-González & Stephen Rassenti, 2011. "Real Effort, Real Leisure and Real-time Supervision: Incentives and Peer Pressure in Virtual Organizations," Working Papers 11-05, Chapman University, Economic Science Institute.
  12. Gerhard Riener & Simon Wiederhold, 2011. "Costs of Control in Groups," Ifo Working Paper Series Ifo Working Paper No. 113, Ifo Institute for Economic Research at the University of Munich.

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