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Perverse Incentives? Labor Market Regulation and Performance in the Public Sector
Author(s) -
Chong Alberto,
Cozzubo Angelo
Publication year - 2019
Publication title -
southern economic journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.762
H-Index - 58
eISSN - 2325-8012
pISSN - 0038-4038
DOI - 10.1002/soej.12367
Subject(s) - endogeneity , proxy (statistics) , incentive , public sector , labour economics , economics , instrumental variable , test (biology) , tertiary sector of the economy , public service , variable (mathematics) , microeconomics , econometrics , public relations , mathematical analysis , economy , mathematics , machine learning , computer science , paleontology , political science , biology
We test the link between labor market regulations and job performance in the public sector using a novel outcome variable, namely, the number of days it takes the postal service to return letters sent to nonexistent foreign addresses, a measure that we argue is an excellent proxy for job performance. We find a positive and statistically significant link between these two variables, regardless of the labor regulation measure employed, changes in specification, and even unlikely endogeneity considerations, which suggest that this finding may be causal.