Public Sector Employees: Risk Averse and Altruistic?
Erasmus University Rotterdam (EUR)
Erasmus University Rotterdam (EUR) - Department of Economics; Tinbergen Institute
Erasmus University Rotterdam (EUR) - Department of Economics; Tinbergen Institute; CESifo (Center for Economic Studies and Ifo Institute for Economic Research); Institute for the Study of Labor (IZA)
Seth Van den Bossche
TNO Quality of Life - Work and Employment
June 28, 2012
CESifo Working Paper Series No. 3851
We assess whether public sector employees have a stronger inclination to serve others and are more risk averse than employees in the private sector. A unique feature of our study is that we use revealed rather than stated preferences data. Respondents of a large-scale survey were offered a substantial reward and could choose between a widely redeemable gift certificate, a lottery ticket, or making a donation to a charity. Our analysis shows that public sector employees are significantly less likely to choose the risky option (lottery) and, at the start of their career, significantly more likely to choose the pro-social option (charity). However, when tenure increases, this difference in pro-social inclinations disappears and, later on, even reverses. Further, our results suggest that quite a few public sector employees do not contribute to charity because they feel that they already contribute enough to society at work for too little pay.
Number of Pages in PDF File: 32
Keywords: public service motivation, risk aversion, revealed preferences data
JEL Classification: H100, J450, M520working papers series
Date posted: June 30, 2012
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