Template-Type: ReDIF-Paper 1.0 Series: Tinbergen Institute Discussion Papers Creation-Date: 2004-06-02 Number: 04-060/1 Author-Name: Josse Delfgaauw Author-Email: email@example.com Author-Workplace-Name: Faculty of Economics, Erasmus Universiteit Rotterdam Author-Name: Robert Dur Author-Email: firstname.lastname@example.org Author-Workplace-Name: Faculty of Economics, Erasmus Universiteit Rotterdam, and CESifo, Munich Title: Incentives and Workers' Motivation in the Public Sector Abstract: Civil servants have a reputation for being lazy. However, people's personal experiences with civil servants frequently run counter to this stereotype. We develop a model of an economy in which workers differ in laziness and in public service motivation, and characterise optimal incentive contracts for public sector workers under different informational assumptions. When civil servants' effort is unverifiable, lazy workers find working in the public sector highly attractive and may crowd out dedicated workers. When effort is verifiable, a cost-minimising government optimally attracts dedicated workers as well as the economy's laziest workers by offering separating contracts, which are both distorted.
This discussion paper has resulted in a publication in The Economic Journal. Classification-JEL: H1; J3; J4; L3; M5 Keywords: Public Sector Labour Markets; Incentive Contracts; Work Ethics; Public Service Motivation File-Url: http://papers.tinbergen.nl/04060.pdf File-Format: application/pdf File-Size: 262904 bytes Handle: RePEc:tin:wpaper:20040060