Jobs for Sale: Corruption and Misallocation in Hiring
American Economic Review · 2021 · Volume 111 · Issue 10
Abstract
Corrupt government hiring is common in developing countries. This paper uses original data to document the operation and consequences of corrupt hiring in a health bureaucracy. Hires pay bribes averaging 17 months of salary, but contrary to conventional wisdom, their observable quality is comparable to counterfactual merit-based hires. Exploiting variation across jobs, I show that the consequences of corrupt allocations depend on the correlation between wealth and quality among applicants: service delivery outcomes are good for jobs where this was positive and poor when negative. In this setting, the correlation was typically positive, leading to relatively good performance of hires.
Keywords
Bureaucracy, Administrative Processes in Public Organizations, Corruption, Analysis of Health Care Markets, Economics of Gender, Non-labor Discrimination, Human Capital, Skills, Occupational Choice, Labor Productivity, Public Sector Labor Markets, Personnel Economics: Firm Employment Decisions, Promotions, Formal and Informal Sectors, Shadow Economy, Institutional Arrangements
Enable JavaScript for citation tools and additional paper interactions.