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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 Group, 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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    Cited by:

    1. Bodo Knoll & Nadine Riedel & Eva Schlenker, 2017. "He's a Chip Off the Old Block — The Persistence of Occupational Choices Across Generations," LABOUR, CEIS, vol. 31(2), pages 174-203, June.
    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.

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    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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