Measuring Rents from Public Employment: Regression Discontinuity Evidence from Kenya

54 Pages Posted: 4 Aug 2017

See all articles by Nicholas Barton

Nicholas Barton

Goethe University Frankfurt

Tessa Bold

Stockholm University - Institute for International Economic Studies (IIES)

Justin Sandefur

Center for Global Development

Multiple version iconThere are 2 versions of this paper

Date Written: June 21, 2017

Abstract

Public employees in many developing economies earn much higher wages than similar private-sector workers. These wage premia may reflect an efficient return to effort or unobserved skills, or an inefficient rent causing labor misallocation. To distinguish these explanations, we exploit the Kenyan government’s algorithm for hiring eighteen-thousand new teachers in 2010 in a regression discontinuity design. Fuzzy regression discontinuity estimates yield a civil-service wage premium of over 100 percent (not attributable to observed or unobserved skills), but no effect on motivation, suggesting rent-sharing as the most plausible explanation for the wage premium.

Keywords: Civil Servants, Teachers, Public Sector Wages, Wage Gap, Motivation

JEL Classification: H1, J3, O1

Suggested Citation

Barton, Nicholas and Bold, Tessa and Sandefur, Justin, Measuring Rents from Public Employment: Regression Discontinuity Evidence from Kenya (June 21, 2017). Center for Global Development Working Paper No. 457, June 2017, Available at SSRN: https://ssrn.com/abstract=3013390 or http://dx.doi.org/10.2139/ssrn.3013390

Nicholas Barton

Goethe University Frankfurt ( email )

Grüneburgplatz 1
Frankfurt am Main, 60323
Germany

Tessa Bold

Stockholm University - Institute for International Economic Studies (IIES) ( email )

Stockholm, SE-10691
Sweden

Justin Sandefur (Contact Author)

Center for Global Development ( email )

2055 L St. NW
5th floor
Washington, DC 20036
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
37
Abstract Views
374
PlumX Metrics