Poster #110 - The Making of a Public Sector Worker: Causal Effects of Temporary Work Assignments to Poor Areas

• In Event: Friday Poster Reception

Abstract

A growing body of research shows that beliefs and preferences are malleable (Kosse et al., 2020; Abeler et al., 2021; Alan et al., 2022). While most existing work is based on low-stakes decisions in lab-in-the-field experiments, these insights have the potential to address broader economic behavior and to inform high-stakes policy design. Policies that aim to harness the endogeneity of preferences and beliefs could thus supplement existing approaches like monetary incentives to induce desired behaviors. This paper studies whether temporary exposure to disadvantaged populations can affect labor market outcomes for health professionals, offering new evidence on the endogenous evolution of preferences and the design of public sector assignment policies.

To study this question, we exploit exogenous variation in location choice sets to do a mandatory rural service program for health professionals in Peru, a policy that exists in over 70 countries worldwide. Psychologists and other health workers must complete a 12-month placement in a rural public facility to qualify for future public sector employment. Assignments for psychologists are determined through biannual, region- and institution-specific lotteries. Applicants self-select into a lottery pool, receive randomly assigned priority numbers, and choose from the remaining locations in sequence. This setting generates quasi-random variation in exposure to poorer areas through the exogenously determined order in which individuals select locations.

We combine program and employment administrative data from Peru’s Ministry of Health with original survey data from 709 psychologists who completed the program between 3 and 33 months prior. The survey collects information on employment trajectories, location preferences, beliefs, and prosocial behavior. Using this data, we construct a composite index of prosociality based on job preferences, redistributive attitudes, and multiple measures of donation behavior (stated, hypothetical, and incentivized). 

Our analysis yields three main findings. First, individuals in the bottom tercile of the lottery rank — those who select last and thus face more constrained choices — are 6.1 percentage points more likely to be placed in poorer areas. Second, these individuals are 9.3 percentage points (17%) more likely to work in the public sector after completing the program, with effects concentrated in poorer districts and facilities serving vulnerable populations. Third, we find evidence consistent with a change in preferences and beliefs: lower-ranked individuals are more willing to accept hypothetical jobs in poor areas and score 0.12 standard deviations higher on the prosociality index.

Importantly, we find little evidence that these effects are driven by alternative mechanisms such as differential job opportunities, inertia, or skill acquisition. Instead, the findings suggest that contact with disadvantaged communities during the program shaped preferences in ways that influenced subsequent labor market choices.

Our results contribute to the literature on the endogeneity of preferences and the behavioral foundations of occupational choice. They underscore the potential for short-term, high-stakes public sector assignments to not only address immediate workforce shortages but also induce lasting changes in the motivations of professionals. These findings have implications for the design of public sector recruitment and retention strategies, suggesting that policy can shift preferences—not just match them.

Author

• Mariel R Bedoya, Teachers College, Columbia University
  Presenting Author