Dishonesty and Selection into Public Service in Denmark: Who Runs the World's Least Corrupt Public Sector?

Abstract

Are country-level differences in corruption related to the dishonesty level of individuals entering public service? Recent studies have found that dishonest individuals self-select into public service in high-corruption settings. Little is known, however, about what is driving this pattern and whether a similar pattern exists in low-corruption settings. This paper examines selection into public service in the world’s least corrupt country, Denmark. We subject a relevant student population to a standard experimental dishonesty task and develop a novel method to estimate individual-level dishonesty from the experimental data. We then relate estimates of dishonesty to subjects’ job preferences and characteristics. In contrast to previous findings, dishonest individuals in low-corruption Denmark are less likely to want to enter public service. This self-selection is not related to risk-aversion or ability. Instead, we find that dishonest individuals who self-select into higher paid private sector careers such as finance are less altruistic and place a higher weight on their own earning opportunities. Accordingly, counterfactual wage questions suggest that higher public sector wages would attract more dishonest candidates to the public sector in Denmark.

Keywords: occupational choice, sector choice, coin tossing, dice under cup

JEL Classification: D73 C91, H83