Putting a price on tenure

Thiago Marzagão

No dvy9w, OSF Preprints from Center for Open Science

Abstract: Government employees in Brazil are granted tenure after three years of taking their entrance exams. Firing a tenured government employee is all but impossible, so tenure is a big perquisite. But exactly how big is it? No one has ever attempted to estimate the monetary equivalent of tenure for Brazilian government workers. We do that in this paper. We use a modified version of the Sharpe ratio to estimate what the risk-adjusted salaries of government workers should be. The difference between actual salary and risk-adjusted salary gives us an estimate of how much tenure is worth for each employee. We find that the median value of tenure is R$ 4517 for federal government employees, R$ 2560 for state government employees, and R$ 672 for municipal government employees.

Date: 2021-03-26
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Persistent link: https://EconPapers.repec.org/RePEc:osf:osfxxx:dvy9w

DOI: 10.31219/osf.io/dvy9w

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