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Promotions and Productivity: The Role of Meritocracy and Pay Progression in the Public Sector

Author

Listed:
  • Erika Deserranno
  • Philipp Kastrau
  • Gianmarco León-Ciliotta

Abstract

We study promotion incentives in the public sector. In collaboration with Sierra Leone's Ministry of Health, we introduce exogenous variation in the meritocratic nature of promotions from health worker to supervisor positions and in health workers' perceptions of pay progression upon promotion. Ten months later, our findings reveal that meritocracy leads to a 22 percent increase in health workers' productivity. Greater perceived pay progression in a meritocratic system boosts productivity by 23 percent, whereas in a less meritocratic system, it decreases productivity by 27 percent. We show that this reduction is consistent with a negative morale effect.

Suggested Citation

  • Erika Deserranno & Philipp Kastrau & Gianmarco León-Ciliotta, 2025. "Promotions and Productivity: The Role of Meritocracy and Pay Progression in the Public Sector," American Economic Review: Insights, American Economic Association, vol. 7(1), pages 71-89, March.
    • Handle: RePEc:aea:aerins:v:7:y:2025:i:1:p:71-89
    DOI: 10.1257/aeri.20230594
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    Cited by:

    1. Mitchell Hoffman & Christopher T. Stanton, 2024. "People, Practices, and Productivity: A Review of New Advances in Personnel Economics," NBER Working Papers 32849, National Bureau of Economic Research, Inc.
    2. Amodio, Francesco & Choi, Jieun & De Giorgi, Giacomo & Rahman, Aminur, 2022. "Bribes vs. taxes: Market structure and incentives," Journal of Comparative Economics, Elsevier, vol. 50(2), pages 435-453.
    3. Stefano Caria & Philipp Kastrau & Erika Deserranno & Gianmarco León-Ciliotta, 2022. "The Allocation of Incentives in Multi-Layered Organizations: Evidence from a Community Health Program in Sierra Leone," Working Papers 1346, Barcelona School of Economics.
    4. Kim, Galileu & Kumar, Tanu & Ramalho, Rita & Russell, Stuart Ehrlich, 2026. "Institutional Capacity for Policy Implementation : An Analytical Framework," Policy Research Working Paper Series 11279, The World Bank.
    5. Maximilian Mähr & Alida Sangrigoli & Giuseppe Sorrenti & Gilberto Turati, 2024. "Retrieving Organs, Losing Motivation? The Response of Medical Staff to Corruption News," CESifo Working Paper Series 11511, CESifo.
    6. Dienes, Harry J. & Rogger, Daniel & Emagne, Yetsedaw & Schinaia, Giulio, 2026. "Individual Demand for Building State Effectiveness," Policy Research Working Paper Series 11299, The World Bank.
    7. Breunig, Robert & Hansell, David & Win, Nu Nu, 2023. "Modelling Australian Public Service Careers," IZA Discussion Papers 16549, IZA Network @ LISER.
    8. Cagatay Bircan & Guido Friebel & Tristan Stahl, 2025. "Gender Promotion Gaps in Knowledge Work: The Role of Task Assignment in Teams," RFBerlin Discussion Paper Series 2518, ROCKWOOL Foundation Berlin (RFBerlin).
    9. Fracchia, Mattia & Molina-Millán, Teresa & Vicente, Pedro C., 2023. "Motivating volunteer health workers in an African capital city," Journal of Development Economics, Elsevier, vol. 163(C).

    More about this item

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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