Risk aversion in the public sector workforce: the micro-level drivers of change

Po Chiu Ivan Lee
For a long-time, public sector employees have been described as "pathologically" risk averse. Research suggests that a high level of risk aversion in the public sector workforce may lead to undesirable consequences such as hindering reforms and innovations. It is therefore important to understand the factors and mechanisms that could change the level of risk aversion in the public sector. Nevertheless, the scientific inquiry on this topic is limited. This dissertation seeks to explore the
more » ... isms that may affect the level of risk aversion in the public sector workforce. It adopts the attraction-selection-attrition-socialization (ASAS) framework to examine two potential micro-level driving forces — namely job attraction effect and work socialization effect — that could affect the level of individuals' risk aversion and thereby ultimately the public sector workforce. The dissertation contains three empirical essays. The first essay uses the systematic review method to identify and evaluate 26 articles published in public administration and other disciplines. The second essay reports a multistage conjoint experiment to examine whether more risk averse individuals are more attracted to the public sector, and whether job seekers consider a job's employment sector when making job decisions. The third essay uses the 2008-2018 dataset of the German Socio-Economic Panel Study (GSOEP) and conducts a longitudinal analysis to explore whether working longer in the public sector could make individuals become more risk averse over time. The findings of the systematic review suggest that prior studies in this area did not clearly define the concept of risk and risk aversion, and that there is limited effort in exploring the antecedents of risk aversion. The findings of the conjoint experiment suggest that individuals high and low in risk aversion do not behave differently in choosing public sector employment, and they do not care about the employment sector when direct information about a job becomes available in the job sear [...]
doi:10.7282/t3-w7m1-mx21 fatcat:2qxhjqz4lve6dcrj7a7brjghoe