Do Higher Government Wages Reduce Corruption? Evidence Based on a Novel Dataset
29 Pages Posted: 6 Jun 2013
Date Written: May 31, 2013
This paper employs a novel dataset on government wages to investigate the relationship between government remuneration policy and corruption. Our dataset, as derived from national household or labor surveys, is more reliable than the data on government wages as used in previous research. When the relationship between government wages and corruption is modeled to vary with the level of income, we find that the impact of government wages on corruption is strong at relatively low-income levels.
Keywords: corruption, government wages, government pay policy, efficiency wages
JEL Classification: J380, J410, J450, O570
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