Public Sector Employees: Risk Averse And Altruistic?
Source: Institute for the Study of Labor
The authors 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 their paper is that they 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. Their 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.