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On Selection into Public Civil Service

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  • Tobias Böhm
  • Nadine Riedel

Abstract

This article investigates whether the institution of life-time tenure for public sector workers affects the selection of workers into private and public sector occupations. Precisely, we argue that more generous employment protection for public sector workers may induce risk averse individuals to select into public sector employment even if they have a low intrinsic motivation and talent for this type of occupation. To empirically assess this effect, we use Germany as a testing ground and exploit changes in employment protection induced by the German reunification in 1990 as a source for identification. Specifically, while occupational choices in West Germany (Federal Republic of Germany) and post reunification East Germany may be affected by the described security motive, workers in pre reunification East Germany (German Democratic Republic, GDR) enjoyed an employment guarantee irrespective of their occupation. Using data from the German Socioeconomic Panel, we employ a difference-in-differences approach and use absenteeism as a proxy for intrinsic worker motivation and productivity. The results suggest a significant selection effect: public sector employees who chose their occupation in the FRG report more days of absence relative to comparable private sector workers than the control group of public sector workers who chose their occupation in the former GDR. This effect turns out to be robust against controlling for potential socioeconomic and cultural differences between the groups. (JEL codes: J45, J5, H8) Copyright The Author 2012. Published by Oxford University Press on behalf of Ifo Institute, Munich. All rights reserved. For permissions, please email: journals.permissions@oup.com, Oxford University Press.

Suggested Citation

  • Tobias Böhm & Nadine Riedel, 2013. "On Selection into Public Civil Service," CESifo Economic Studies, CESifo, vol. 59(1), pages 34-71, March.
  • Handle: RePEc:oup:cesifo:v:59:y:2013:i:1:p:34-71
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    File URL: http://hdl.handle.net/10.1093/cesifo/ifs037
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    References listed on IDEAS

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    1. Timothy Besley & Maitreesh Ghatak, 2005. "Competition and Incentives with Motivated Agents," American Economic Review, American Economic Association, vol. 95(3), pages 616-636, June.
    2. Ziebarth, Nicolas R. & Karlsson, Martin, 2010. "A natural experiment on sick pay cuts, sickness absence, and labor costs," Journal of Public Economics, Elsevier, vol. 94(11-12), pages 1108-1122, December.
    3. Riphahn, Regina T. & Thalmaier, Anja, 1999. "Behavioral Effects of Probation Periods: An Analysis of Worker Absenteeism," IZA Discussion Papers 67, Institute for the Study of Labor (IZA).
    4. Delfgaauw, Josse & Dur, Robert, 2007. "Signaling and screening of workers' motivation," Journal of Economic Behavior & Organization, Elsevier, vol. 62(4), pages 605-624, April.
    5. Francois, Patrick, 2000. "'Public service motivation' as an argument for government provision," Journal of Public Economics, Elsevier, vol. 78(3), pages 275-299, November.
    6. Riphahn, Regina T., 2004. "Employment protection and effort among German employees," Economics Letters, Elsevier, vol. 85(3), pages 353-357, December.
    7. Simon Burgess & Marisa Ratto, 2003. "The Role of Incentives in the Public Sector: Issues and Evidence," Oxford Review of Economic Policy, Oxford University Press, vol. 19(2), pages 285-300, Summer.
    8. Ichino, Andrea & Riphahn, Regina T., 2001. "The Effect of Employment Protection on Worker Effort: A Comparison of Absenteeism During and After Probation," IZA Discussion Papers 385, Institute for the Study of Labor (IZA).
    9. Sinan Aral & Erik Brynjolfsson & Marshall Van Alstyne, 2007. "Information, Technology and Information Worker Productivity: Task Level Evidence," NBER Working Papers 13172, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Bodo Knoll & Nadine Riedel & Eva Schlenker, 2013. "He's a Chip Off the Old Block - The Persistence of Occupational Choices Across Generations," CESifo Working Paper Series 4428, CESifo Group Munich.
    2. Ong, Qiyan & Theseira, Walter, 2016. "Does choosing jobs based on income risk lead to higher job satisfaction in the long run? Evidence from the natural experiment of German reunification," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 65(C), pages 95-108.

    More about this item

    JEL classification:

    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
    • J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining
    • H8 - Public Economics - - Miscellaneous Issues

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