Career Incentives in the Public Sector: Evidence from the Sierra Leonean CHW Program
The proposed study will test the effect a steeper wage progression between low-tier employees (e.g., frontline service providers) and higher-tier employees (e.g. supervisors, bosses) has on organizational performance. Further, we will test whether if this effect differs in meritocratic vs. non-meritocratic promotion systems. While steep wage progression may incentivize lower-tier workers to perform better in a meritocratic regime (through career incentives), it may instead demotivate workers in a non- meritocratic regime (through fairness or inequality concerns). We collaborate with a national public organization - the National Community Health Worker Program in Sierra Leone - in which supervisors (high-tier workers) are in charge of monitoring and advising 9 health workers (lower-tier workers). When a supervisor decides to quit her position, one of the health workers is promoted to the supervisor position. Until now, promotions from health worker to supervisor were de facto made at the discretion of the head of each health unit and therefore mostly based on personal connections rather than merit. For this study, we collaborate with the Ministry of Health and Sanitation (MOHS) to shift – in a random half of 372 health units — to a meritocratic promotion system, which uses the number and quality of health services provided as the main input for promotion decisions. The experimental variation in meritocracy is cross randomized with variation in perceived wage steepness; i.e., in a random half of the 372 health units, health workers are informed about the large wage gap between their own salary and that of the supervisor (which at baseline is underestimated). The design will allow us to test how increasing the perceived vertical wage steepness affects low-tier workers’ effort in regimes that are more vs. less meritocratic, and whether this effect differs by worker ability and worker political connectedness. This study will leverage infrastructure from an ongoing study on pay-for-performance, which greatly contributes to its cost-effectiveness.1 Our results will contribute to our knowledge about the effects of career incentives in multi-tier organizations and help policy makers in Sierra Leone improve health care delivery in the country.