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The Impact of an Unexpected Wage Cut on Corruption: Evidence from a "Xeroxed" Exam

Author

Listed:
  • Oana Borcan
  • Mikael Lindahl
  • Andreea Mitrut

Abstract

This paper aims to understand how corruption responds to an income loss. We exploit an unexpected 25% wage cut incurred in 2010 by all Romanian public sector employees, including the public education staff. We investigate a corruptible high-stake exam taking place shortly after the wage announcement. To measure corruption we compare changes in exam outcomes from 2009 to 2010 between public and private schools, as the latter were not affected by the policy. We find that the wage loss induced better exam outcomes in public than in private schools and we attribute this difference to increased corruption by public educators.

Suggested Citation

  • Oana Borcan & Mikael Lindahl & Andreea Mitrut, 2012. "The Impact of an Unexpected Wage Cut on Corruption: Evidence from a "Xeroxed" Exam," CESifo Working Paper Series 4038, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_4038
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Joël CARIOLLE, 2016. "The voracity and scarcity effects of export booms and busts on bribery," Working Papers P146, FERDI.
    2. Oana Borcan & Mikael Lindahl & Andreea Mitrut, 2017. "Fighting Corruption in Education: What Works and Who Benefits?," American Economic Journal: Economic Policy, American Economic Association, vol. 9(1), pages 180-209, February.
    3. Mavisakalyan, Astghik & Meinecke, Juergen, 2016. "The labor market return to academic fraud," European Economic Review, Elsevier, vol. 82(C), pages 212-230.
    4. Hinnerich, Björn Tyrefors & Vlachos, Jonas, 2017. "The impact of upper-secondary voucher school attendance on student achievement. Swedish evidence using external and internal evaluations," Labour Economics, Elsevier, vol. 47(C), pages 1-14.
    5. repec:eee:joepsy:v:63:y:2017:i:c:p:1-16 is not listed on IDEAS
    6. Joël CARIOLLE, 2014. "Corruption in Turbulent Times: a Response to Shocks?," Working Papers P106, FERDI.

    More about this item

    Keywords

    public educators; bribes; high-stakes exam;

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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