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.
# 16-109/VII (2016-12-13)
- Robert Dur, Erasmus University Rotterdam, The Netherlands; Max van Lent, Erasmus University Rotterdam, The Netherlands
- altruism, charitable donations, public service motivation, public sector employment, self-selection
- JEL codes:
- D64, H11, J45, M50