Public Sector Employees: Risk Averse and Altruistic?

Abstract

We assess whether public sector employees have a stronger inclination to serve others and are more risk averse than employees in the private sector. A unique feature of our study is that we use revealed rather than stated preferences data. Respondents of a large-scale survey were offered a substantial reward and could choose between a widely redeemable gift certificate, a lottery ticket, or making a donation to a charity. Our analysis shows that public sector employees are significantly less likely to choose the risky option (lottery) and, at the start of their career, significantly more likely to choose the pro-social option (charity). However, when tenure increases, this difference in pro-social inclinations disappears and, later on, even reverses. Our results further suggest that quite a few public sector employees do not contribute to charity because they feel that they already contribute enough to society at work for too little pay.Keywords: public service motivation, risk aversion, revealed preferences data.JEL codes: H1, J45, M52. * We gratefully acknowledge comments and suggestions by Josse Delfgaauw and participants to the 2009 CMPO Workshop 'Public services and worker motivation' in Bristol.

Identification and Trust in Public Organizations: A communicative approach

“…Some scholars have characterized this agenda as an explicit attempt to alter the identity of the public sector worker (Horton 2006;Bourgault and Van Dorpe 2013). In particular, the relationship between trust and identification may be particularly important in understanding identification in the public sector, particularly as public servants may be more risk averse than their private sector counterparts (Buurman et al 2012) and are moreover accustomed to relatively stronger job security. Future studies that examine organizational identification across sectors and take into consideration these factors, therefore, may produce meaningful insights into identification processes.…”

“…The concept of organizational identification has as yet played little role in public administration scholarship, despite its obvious relevance to the field and the potential benefits that a deeper understanding how civil servants form a bond with their organization may deliver. In addition to having a strong identification with public sector values (Perry and Wise 1990), some evidence suggests that public sector workers may in general be more risk averse than their private sector counterparts (Buurman et al 2012), and as such organizational trust may be an important driver of identification in public organizations. Given this, using data from the public sector to explore how trust is related to organizational identification has both theoretical and practice-relevant advantages.…”

Risky business: an analysis of teacher risk preferences

“…Support for the notion that incoming teachers tend to be relatively risk averse could have important implications for education policy-makers. Buurman et al (2012) note that if public employees are more risk averse, 'pay-for-performance is a more costly instrument to induce effort in the public sector than in the private sector' (4). Similarly, implementing performance pay may increase the levels of tension and worker dissatisfaction (Dohmen and Falk 2010;Perez 2011).…”

“…Bellante and Link 1981;Hartog, Ferrer-i-Carbonell, and Jonker 2002;Masclet et al 2009). Taking advantage of a behavioural outcome measure, Buurman et al (2012) find that workers who have entered the public sector are less likely to choose riskier compensations for completing surveys than private sector employees. Dohmen and Falk (2010) have conducted a laboratory experiment with different payment schemes and found that those who self-reported being risk averse were more likely to prefer fixed wages.…”

Management of Bureaucrats and Public Service Delivery: Evidence from the Nigerian Civil Service

“…(i) dictator games to examine how many resources an individual transfers to a pro-social task (Ashraf et al, 2014); and (ii) charitable contributions (Buurman et al, 2012).…”