TY  - RPRT
        AU  - Bó, Ernesto Dal
AU  - Finan, Frederico S.
AU  - Rossi, Martín A.
        TI  - Strengthening State Capabilities: The Role of Financial Incentives in the Call to Public Service
        PY  - 2012/Jun/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 6645
        UR  - https://www.iza.org/index.php/publications/dp6645
        AB  - We study a recent recruitment drive for public sector positions in Mexico. Different salaries were announced randomly across recruitment sites, and job offers were subsequently randomized. Screening relied on exams designed to measure applicants' intellectual ability, personality, and motivation. This allows the first experimental estimates of (i) the role of financial incentives in attracting a larger and more qualified pool of applicants, (ii) the elasticity of the labor supply facing the employer, and (iii) the role of job attributes (distance, attractiveness of the municipal environment) in helping fill vacancies, as well as the role of wages in helping fill positions in less attractive municipalities. A theoretical model guides each stage of the empirical inquiry. We  find that higher wages attract more able applicants as measured by their IQ, personality, and proclivity towards public sector work – i.e., we  find no evidence of adverse selection effects on motivation; higher wage offers also increased acceptance rates, implying a labor supply elasticity of around 2 and some degree of monopsony power. Distance and worse municipal characteristics strongly decrease acceptance rates but higher wages help bridge the recruitment gap in worse municipalities.
        KW  - state building
KW  - state capabilities
KW  - state capacity
KW  - public sector personnel
KW  - bureaucracy
KW  - public service motivation
KW  - labor markets
KW  - wages
KW  - elasticity of the labor supply
KW  - personality
        ER  -