Promotions and productivity: the role of meritocracy and pay progression in the public sector

Abstract

We study promotion incentives in the public sector. In collaboration with Sierra Leone's Ministry of Health, we introduce exogenous variation in the meritocratic nature of promotions from health worker to supervisor positions and in health workers' perceptions of pay progression upon promotion. Ten months later, our findings reveal that meritocracy leads to a 22 percent increase in health workers' productivity. Greater perceived pay progression in a meritocratic system boosts productivity by 23 percent, whereas in a less meritocratic system, it decreases productivity by 27 percent. We show that this reduction is consistent with a negative morale effect.

Financial support for this project was provided by UK aid from the UK government (through the Economic Development and Institutions initiative, grant PO_26429), the Rockefeller Foundation (through the International Growth Center, grant PIR_20180220), J-PAL's Governance Initiative (GR0961), and the Weiss Family Fund (NWU-004). León-Ciliotta thanks the Spanish Ministry of Economy and Competitiveness (through the Severo Ochoa Programme for Centres of Excellence in R&D (CEX2019-000915-S) and grants (RYC2017-23172 funded by MICIU/AEI /10.13039/501100011033 and FSE invierte en tu futuro) and the Fundación Ramón Areces. IRB has been approved by the Sierra Leone Ethics and Scientific Review Committee and Universitat Pompeu Fabra (CIREP Approval 107).