Do higher earnings outweigh government’s calling?

We analyze how wages for public service workers affect the likelihood workers will leave their job by using of rich administrative data from statistics Netherlands.

By making use of propensity score matching (one-to-one, nearest neighbor matching) on background and job characteristics, we match workers in the public sector to their equal counterparts. After calculating the wage gap between those groups, we find that in some sectors differences in hourly wages explain why public service workers leave or stay for some public service sectors (national government, municipalities, defense military, health care, and education). For other sectors, wage differences play a minor role (water management, provinces, and justice).

These results indicate that primary labor conditions may be more important for some branches of government than previously thought.