Working Paper: NBER ID: w28665
Authors: Diana Moreira; Santiago Pérez
Abstract: Competitive exams are a standard method for selecting civil servants. Yet, there is limited evidence on their effectiveness. We digitize personnel and financial data to study the impacts of the 1883 Pendleton Act, which mandated exams for some employees in the largest US customs-collection districts. Although the act improved targeted employees’ professional background and reduced turnover, it did not increase cost-effectiveness in customs revenue collection. Moreover, it incentivized hiring in exam-exempted positions, distorting districts’ hierarchical structures. These results illustrate how, by triggering countervailing organizational responses, policies that succeed at improving specific organizational aspects might nevertheless fail to improve overall performance.
Keywords: Civil Service Exams; Organizational Performance; Pendleton Act
JEL Codes: H83; N41
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Improvements in professional backgrounds of targeted employees (M53) | Increase in qualifications relevant to customs service positions (F19) |
| Incomplete reach of the reform (E69) | Lack of improvement in overall performance (D29) |
| Exam-hired employees (M51) | Less effort due to misalignment with political goals (H19) |
| Pendleton Act (H83) | Improvements in professional backgrounds of targeted employees (M53) |
| Pendleton Act (H83) | No significant increase in cost-effectiveness in customs revenue collection (H26) |