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Getting good civil servants for tough jobs

Markus Goldstein's picture

Imagine you are running the recruitment process for a government agency and you are trying to attract high quality, public service oriented staff to work in difficult agencies.   How should you do this?   If you offer higher wages, maybe it will get you higher quality folks, but will you lose public service motivation?   And how do you get these high quality folks to go to remote and dangerous areas?  

This is a question tackled with some elegance in a new paper by Ernesto Bo, Frederico Finan and Martin Rossi.   They are working with a recruitment experiment by the Mexican Regional Development Program, which places coordinators and community development agents within particularly marginalized municipalities to help them build up the provision of public goods.  

Bo and company start with the question: will higher wages get you better applicants?  This would seem obvious, but spending some time in certain African countries and looking at parliamentary salaries might make you question how obvious this is.     And heck, this is definitely not confined to certain African countries. But empirically, this is clearly a hard thing to disentangle.   So how do they do it?

The set up of the experiment is where the elegance shows up.   First, they allocate two wages: 3750 pesos a month and 5000 pesos a month (about $500), randomly across the sites that were seeking to recruit a total of 350 community development agents. Positions were then advertised and applicants invited to apply via phone or email (but the wage wasn’t revealed to them until they got in touch to register to avoid early sorting). 

Then, applicants were invited into a screening process.   This consisted of a three hour exam including questions on aptitude (including a Raven test to measure IQ), personality (including the “Big 5” – openness, conscientiousness, extraversion, agreeableness, and neuroticism -- that Francisco and I talked about two weeks ago), motivations (with a focus on the public sector), and job history.  (For those interested in how to measure these issues, this section of the paper is well worth reading.) 

After going through this process, eligible candidates were grouped into those with normal IQ levels (a Raven score between 7 and 9) and those with high IQ scores (10-12).   This gives them four strata of applicants : 1) high wage and high IQ , 2) high wage and normal IQ, 3)low wage and high IQ and, 4) low wage and normal IQ.   Each of the 350 vacancies was then randomly assigned to one of these types and applicants were randomly selected to fill these vacancies conditional on type, region of residence and whether or not the applicant was indigenous. 

All of this random assignment lets them get at a number of questions of interest to public sector hiring (and labor markets more generally).   First off: do you get better applicants when you offer a higher wage?   The answer is yes.   Applicants in higher wage situations were better in a number of dimensions.   First, they had higher previous wages by around 22% (so the market thinks they’re better).   Second, they had higher IQ scores by 0.19 standard deviations on the Raven test – and interestingly this seems to be driven both by higher number of high IQ applicants and lower number of lower IQ applicants.   Moreover, those offered higher wages were also more likely to score higher on some measures of the Big 5 personality traits.  

What about public sector motivation?   This is a bit trickier because quality and public sector motivation are possibly correlated – and maybe even deterministically related.   And indeed, they find evidence that the pool of applicants in higher wage areas had more indicators of public sector motivation. So while they can’t definitively nail down what’s going on, they can say that the hire wage offer did not lead to any sacrifice in terms of public sector motivation. 

The second question they can answer is by how much the higher wage turns into higher acceptance of job offers. Indeed, this is the first randomized setup of the question of the elasticity of labor supply I have seen. So for the folks offered 3750 pesos, 42.9 accepted.   The 5000 peso offer got them an additional 35% in terms of acceptances.   When they take into account the higher application rate, they end up with an arc-elasticity estimate of the labor supply facing the employer of 2.15 – an estimate that is in line with work using quasi-experimental methods.  

Finally, keep in mind that these are the most marginalized communities in Mexico. Consequently they are tough places to work – when you measure this by a human development index or by the number of drug-related deaths.   And individuals might have to travel a fair distance to get there.   So the final aspect Bo and co-authors look at is how the higher wage may entice applicants to take jobs in the tougher places.   Distance has a significant effect on uptake overall:   while 80% of those offered a job less than 100 kilometers away took the job regardless of salary, this fraction drops to 25 percent among the low wage group for distances of 200 kilometers or more.   However, for the high wage group, acceptance remains around 80 percent for these bigger distances.   In terms of violence and lower levels of human development, worse conditions lower the acceptance of the job offer.   Again, these are mitigated by the higher wages (although for drug-related deaths, the result is significant at 10 percent).  

So in the end, if you pay them more you will get better people.   And they’ll take the tough jobs, far from home.   It seems to work for civil servants, now we just need to make this work with politicians.  

Comments

Hi Markus, strongly recommend you have a look at some East Asian civil service recruitment policies during their economic boom years -- it will strengthen your argument. Hong Kong's which I know well, involved looking around the world for the best people in their fields and recuiting them with a great package of salaries, housing benefits, payment for children's schooling etc. The result is that Hong Kong has, for example, one of the best legal codes in the world, because the legistative arm of Government is so chock-full of brilliant lawyers. The other thing that you have to bear in mind here is that once in the system, management matters enormously. You may have a brilliant person with the best of intentions and motivation, but that can die away very quickly (even on a good salary) when they are mismanaged and find themselves fighting against a system that does not make the most of them - I've seen many, many civil servants lose motivation in this way and wind up just going through the motions - or returning to the private sector. This happens in donor organisations, too. Donors have long built an artificial wall in their funding, saying that GBS excepted, they will not fund any recurrent expenditure, because it's not an investment. This is logically flawed: good staff is an investment, because good people change their organisations for the better, when used properly. Many civil services have a lot of dead wood, and bad management. I've repeatedly advocated a policy of investing heavily in management and incentivisation, careful reconsideration of department sizes and structures and (if necessary, donor-backed) wage improvements. I strongly, strongly believe that within 10-20 years, these changes would pay for themselves, with great added interest...

Submitted by Nick Manning on
In some ways, the findings seem obvious - why wouldn't better people be attracted by better salaries? - but one of the difficulties in working out the policy implications is to do with the nature of the skills required for the job. The jobs described in the study are somewhat generic "community development agents" whose task, as far as I can work out, is to act as sort of publicity agents for the state's presence and to act as advocates for better services. That is rather different to the skills of a medical specialist or a senior policy advisor (who has to understand contorted political terrain and senior management interests). To the extent that these people exist outside of the public sector then my intuition (backed by some old research in Indonesia) is that the orders of magnitude necessary to attract them to work in the public sector, especially in tough areas, are very different to the 500 vs. 350 Pesos. The more plausible (affordable) bet for those is to recruit them young (and cheap) and keep them within the public sector. That gets at questions of career paths, pension schemes and backloaded compensation arrangements. So my thoughts are that this is an interesting study - but we run the risk of being sucked into a narrative that the answer to skill gaps is to simply respond to short term pressures in the labor market as if the public sector was much the same as Starbucks.

Submitted by Yongmei on
We have a live challenge right here at the Bank: how to attract the best to serve our clients in fragile and conflict affected states? Over the years, the Bank has implemented a number of measures to sweeten the financial package and improve career prospect. While there are many applicants for hardship jobs, quality and sustainability are big challenges. Will DEC be interested in helping HR evaluate impact of various reform measures?