Essays on the Economics of Public Sector Recruitment in India

Abstract

This dissertation compiles three essays that study how the institution of exam-based civil service recruitment in India interacts with the rest of the labor market. In the first chapter, I ask whether the intense competition for civil service jobs affects aggregate labor supply. To answer this question, I study the impact of a civil service hiring freeze in the state of Tamil Nadu. I find that candidates responded by spending more time studying, not less. A decade after the hiring freeze was lifted, the cohorts that were most impacted also have lower earnings, suggesting that participation in the exam process did not build human capital. Finally, I provide evidence that structural features of the testing environment--such as how well candidates are able to forecast their own performance, and the underlying returns to study effort--help explain the observed response. In the second chapter, I use a structural model to estimate how much candidates must value civil service jobs in order to rationalize their exam preparation behavior. Based on data I collected from candidates in Pune, Maharashtra, I estimate total compensation to be worth several times the nominal wage, which suggests that candidates derive most of their value from non-wage amenities. Finally, in the last chapter, Niharika Singh and I study why women remain underrepresented in civil service posts. Using data from Tamil Nadu, we show that test re-taking is a key constraint for women: successful candidates require multiple attempts, but women--particularly those that score well on initial attempts--are less likely to retake the exam than men. We provide suggestive evidence that the pressure to get married constrains high-ability women from making more attempts.