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Estimating Government Worker Skills

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  • Kevin Michael Frick
  • Jonas Gathen

Abstract

We propose a new approach to estimate government worker skills, a setting where output is hard to observe and wages may be uninformative about skills. The approach uses wages in comparable jobs in the private sector and machine learning tools to link skills to skill-related observables. We apply the approach to rich Indonesian household-level panel data from 1988-2014, showing two main applications. First, government skills have continuously declined relative to the private sector, driven by the most skilled workers ending up in the private sector. Second, the Indonesian government pays a wage premium of 43% conditional on skills.

Suggested Citation

  • Kevin Michael Frick & Jonas Gathen, 2026. "Estimating Government Worker Skills," Papers 2604.15819, arXiv.org.
    • Handle: RePEc:arx:papers:2604.15819
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    File URL: http://arxiv.org/pdf/2604.15819
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