The impact of an unexpected wage cut on corruption: Evidence from a “Xeroxed” exam

Borcan, Oana, Lindahl, Mikael and Mitrut, Andreea (2014) The impact of an unexpected wage cut on corruption: Evidence from a “Xeroxed” exam. Journal of Public Economics, 120. pp. 32-47. ISSN 0047-2727

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This paper aims to understand how corruption responds to an income loss. We exploit an unexpected 25% wage cut incurred in 2010 by all Romanian public sector employees, including the public education staff. We investigate a corruptible high-stake exam taking place shortly after the wage announcement. To measure corruption we compare changes in exam outcomes from 2007 to 2010 between public and private schools, as the latter were not affected by the policy. We find that the wage loss induced better exam outcomes in public than in private schools and we attribute this difference to increased corruption by public educators.

Item Type: Article
Uncontrolled Keywords: austerity measures,bribes,public school principals,high-stakes exams
Faculty \ School: Faculty of Social Sciences > School of Economics
Depositing User: Pure Connector
Date Deposited: 24 Sep 2016 00:16
Last Modified: 20 Apr 2023 00:10
DOI: 10.1016/j.jpubeco.2014.08.003

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