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Are Bureaucrats Really Paid Like Bureaucrats?

Author

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  • Ruben Enikolopov

    (The New Economic School)

Abstract

Traditionally, bureaucrats have been viewed as a stereotypical example of employees with flat pay schedules and low-powered incentive schemes. This paper challenges that view by providing evidence that the wages of a particular group of senior bureaucrats - city managers - are tightly connected to their performance as measured by city growth. Additional tests indicate that these results reflect reward for performance, rather than rent extraction, as exogenous shocks to city growth do not affect city managers’ wage. First, I show that the salaries of city managers do not react to observable exogenous shocks to city performance. Next, I demonstrate that performance affects city managers’ wages not only in the city in which they are currently employed, but also in the city in which they work afterwards. Finally, I find that in cities with council-manager forms of government, the wages of mayors - who do not play important roles in running the cities with council-manager form of government - are not sensitive to city performance.

Suggested Citation

  • Ruben Enikolopov, 2011. "Are Bureaucrats Really Paid Like Bureaucrats?," Working Papers w0165, Center for Economic and Financial Research (CEFIR).
  • Handle: RePEc:cfr:cefirw:w0165
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    References listed on IDEAS

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    1. Karachiwalla, Naureen & Park, Albert, 2017. "Promotion incentives in the public sector: Evidence from Chinese schools," Journal of Public Economics, Elsevier, vol. 146(C), pages 109-128.

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    More about this item

    JEL classification:

    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations

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