Theory and Empirics

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Serving the Public Interest in Several Ways:

Theory and Empirics

Robert Dur † and Max van Lent ‡

December 12, 2016

Abstract

We develop a model where people differ in their altruistic preferences

and can serve the public interest in two ways: by making

donations to charity and by taking a public service job and exerting

effort on the job. Our theory predicts that people who are more altruistic

are more likely to take a public service job and, for a given job,

make higher donations to charity. Comparing equally altruistic workers,

those with a regular job make higher donations to charity than

those with a public service job by a simple substitution argument. We

subsequently test these predictions using the German Socio-Economic

Panel Study, which contains data on self-reported altruism, sector of

employment, and donations to charity for more than 7,500 workers.

We find support for our predictions, though some results are sensitive

to the exact definition of a public service job or the estimation

method.

Keywords: altruism, charitable donations, public service motivation,

public sector employment, self-selection.

JEL: D64, H11, J45, M50.

∗ We gratefully acknowledge comments and suggestions by seminar participants in Rotterdam

and participants of the 18th Colloquium on Personnel Economics at the Univerisity

of Vienna, the ESOP Workshop on Work Motivation at the University of Oslo, the Dutch

Economists Day 2016 in Amsterdam, and the Workshop on Prosocial Motivation at Work

at Erasmus University Rotterdam.

† Department of Economics, Erasmus University Rotterdam, Tinbergen Institute, CE-

Sifo, and IZA. E-mail: dur@ese.eur.nl

‡ Department of Economics, Erasmus University Rotterdam, and Tinbergen Institute.

E-mail: vanlent@ese.eur.nl

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