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The impact of an unexpected wage cut on corruption: Evidence from a "Xeroxed" exam
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics.
2014 (English)In: Journal of Public Economics, ISSN 0047-2727, E-ISSN 1879-2316, Vol. 120, 32-47 p.Article in journal (Refereed) Published
Abstract [en]

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.

Place, publisher, year, edition, pages
2014. Vol. 120, 32-47 p.
Keyword [en]
Austerity measures, Bribes, Public school principals, High-stakes exam
National Category
Economics and Business
URN: urn:nbn:se:uu:diva-245549DOI: 10.1016/j.jpubeco.2014.08.003ISI: 000347766200003OAI: oai:DiVA.org:uu-245549DiVA: diva2:793855
Available from: 2015-03-09 Created: 2015-02-26 Last updated: 2015-03-09Bibliographically approved

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Lindahl, Mikael
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