Strengthening State Capabilities: The Role of Financial Incentives in the Call to Public Service

Ernesto Dal Bó, Frederico Finan and Martín Rossi

No 18156, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We study a recent recruitment drive for public sector positions in Mexico. Different salaries were announced randomly across recruitment sites, and job offers were subsequently randomized. Screening relied on exams designed to measure applicants' intellectual ability, personality, and motivation. This allows the first experimental estimates of (i) the role of financial incentives in attracting a larger and more qualified pool of applicants, (ii) the elasticity of the labor supply facing the employer, and (iii) the role of job attributes (distance, attractiveness of the municipal environment) in helping fill vacancies, as well as the role of wages in helping fill positions in less attractive municipalities. A theoretical model guides each stage of the empirical inquiry. We find that higher wages attract more able applicants as measured by their IQ, personality, and proclivity towards public sector work - i.e., we find no evidence of adverse selection effects on motivation; higher wage offers also increased acceptance rates, implying a labor supply elasticity of around 2 and some degree of monopsony power. Distance and worse municipal characteristics strongly decrease acceptance rates but higher wages help bridge the recruitment gap in worse municipalities.

JEL-codes: H1 J24 J3 J42 J45 (search for similar items in EconPapers)
Date: 2012-06
New Economics Papers: this item is included in nep-lab
Note: LS PE POL
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Published as Ernesto Dal Bó & Frederico Finan & Martín A. Rossi, 2013. "Strengthening State Capabilities: The Role of Financial Incentives in the Call to Public Service," The Quarterly Journal of Economics, Oxford University Press, vol. 128(3), pages 1169-1218.

Downloads: (external link)
http://www.nber.org/papers/w18156.pdf (application/pdf)

Related works:
Journal Article: Strengthening State Capabilities: The Role of Financial Incentives in the Call to Public Service (2013)
Working Paper: Strengthening State Capabilities: The Role of Financial Incentives in the Call to Public Service (2012)
Working Paper: Strengthening State Capabilities: The Role of Financial Incentives in the Call to Public Service (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:18156

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w18156

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().