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On Selection into Public Civil Service

Author

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  • Tobias Boehm

    () (Department of Economics, University of Muenster)

  • Nadine Riedel

    () (Centre for Business Taxation, University of Oxford)

Abstract

This paper investigates whether the institution of life time tenure for public sector employees affects the selection of workers into private and public sector occupation. Precisely, we argue that more generous employment protection for public sector employees may induce risk averse individuals to select into civil service employment even if they have a low intrinsic motivation and talent for this type of occupation. To empirically test for this effect, we exploit the natural experiment of the German reunification in 1990. While occupational choices in the Federal Republic of Germany (FRG) before 1990 may be affected by the described security motive, workers in the former German Democratic Republic (GDR) enjoyed an employment guarantee irrespective of their occupation. Using data from the German Socio-Economic Panel, we employ a difference-in-difference approach that takes absenteeism as a proxy for intrinsic worker motivation and productivity. The results suggest a significant selection effect: public sector employees who made their occupational choice in the FRG report more days of absence than the control group of civil servants who chose their occupation in the former GDR. This effect turns out to be robust against controlling for potential socio-economic and cultural differences between the groups.

Suggested Citation

  • Tobias Boehm & Nadine Riedel, 2011. "On Selection into Public Civil Service," Working Papers 1109, Oxford University Centre for Business Taxation.
  • Handle: RePEc:btx:wpaper:1109
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    File URL: http://www.sbs.ox.ac.uk/sites/default/files/Business_Taxation/Docs/Publications/Working_Papers/Series_11/WP1109.pdf
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    References listed on IDEAS

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    1. 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).
    2. Francois, Patrick, 2000. "'Public service motivation' as an argument for government provision," Journal of Public Economics, Elsevier, vol. 78(3), pages 275-299, November.
    3. Riphahn, Regina T., 2004. "Employment protection and effort among German employees," Economics Letters, Elsevier, vol. 85(3), pages 353-357, December.
    4. Timothy Besley & Maitreesh Ghatak, 2005. "Competition and Incentives with Motivated Agents," American Economic Review, American Economic Association, vol. 95(3), pages 616-636, June.
    5. 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.
    6. 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).
    7. 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.
    8. Delfgaauw, Josse & Dur, Robert, 2007. "Signaling and screening of workers' motivation," Journal of Economic Behavior & Organization, Elsevier, vol. 62(4), pages 605-624, April.
    9. 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.
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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

    Keywords

    public sector; employment protection; occupational choice;

    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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