Andrea Cintolesi (Bank of Italy)
Mario Cannella and Enrico Miglino
We estimate public-sector wage premia using a novel design based on civil-service exam outcomes linked to INPS administrative records. Exploiting exam results in an IV event-study framework, we compare winners, waitlisted, and unsuccessful candidates to obtain causal estimates of the returns to public employment. We find that the public-sector wage premium for compliers ranges between 13,000 and 21,000about three times larger than estimates obtained using standard methods. At the same time, we document distortions from queuing for public jobs: employment among waitlisted candidates declines by about 6.6 percentage points in the five years following the exam, with smaller but still significant effects for winners.