Incentives and Workers’ Motivation in the Public Sector

Josse Delfgaauw and Robert Dur

No 1223, CESifo Working Paper Series from CESifo

Abstract: Civil servants have a bad reputation of being lazy. However, citizens' personal experiences with civil servants appear to be significantly better. We develop a model of an economy in which workers differ in laziness and in public service motivation, and characterise optimal incentive contracts for public sector workers under different informational assumptions. When civil servants' effort is unverifiable, lazy workers find working in the public sector highly attractive and may crowd out workers with a public service motivation. When effort is verifiable, the government optimally attracts motivated workers as well as the economy's laziest workers by offering separating contracts, which are both distorted. Even though contract distortions reduce aggregate welfare, a majority of society may be better off as public goods come at a lower cost.

Keywords: public sector labour markets; incentive contracts; work ethics; public service motivation (search for similar items in EconPapers)
JEL-codes: H10 J30 J40 L30 M50 (search for similar items in EconPapers)
Date: 2004
New Economics Papers: this item is included in nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (51)

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Related works:
Journal Article: Incentives and Workers' Motivation in the Public Sector (2008)
Journal Article: Incentives and Workers’ Motivation in the Public Sector (2008)
Working Paper: Incentives and Workers' Motivation in the Public Sector (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_1223

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