3 effect. In contrast to previous research, and for reasons that we explain below, pro-social subjects are more likely to choose the public sector setting, but are significantly _less_ likely to choose the public sector when wages are high.

Our fourth contribution is to precisely compare the pro-sociality of subjects who have selected into the private and public sectors in the real world. We compare the pro-sociality of students at two institutions that are comparable in prestige and competitiveness. Students at the State College of Accountancy (STAN) have firmly committed, but not yet begun, to work in the public sector. A comparable set of university students at the University of Indonesia (UI) have not selected into any job and the vast majority of them will end up in the private sector.

Students at STAN – and nearly all of the students participated – exhibit greater pro-sociality, a result that is important for two reasons. On the one hand, there is no empirical evidence indicating how close the match between individual preferences and organization mission must be in order to trigger systematic between-organization differences in employee orientation. The analysis here indicates that even when this match is not particularly close, significant differences in pro-social orientation can emerge between organizations. We find more pro-social behavior among government employees, but in a country, Indonesia, where the public sector is not ranked highly for its pro-social mission<sup>3</sup> ; and in an organization, the Ministry of Finance, that is not, in any country, tasked with the type of “caring” mission that would be more obviously associated with pro-social behavior.

On the other hand, the comparison of the pro-sociality of STAN and UI students addresses a central question in the literature concerning the mechanism through which government employees come to be more pro-social. In particular, are government employees more pro-social because prosocial individuals select into the government sector, or because service in the government sector reinforces pro-social behavior? Our novel subject pool allows us to isolate the effect of selection.

Existing research has already made substantial progress in analyzing the attitudes and values of public and private sector employees; the next section of the paper describes in more detail our contribution to this literature. We then describe our experimental design and subject pool in Indonesia. The remainder of the paper presents our results in detail, along with numerous robustness checks.

# **Contribution to prior research**

A substantial theoretical and empirical literature relates to the questions we address here: the measurement of pro-social behavior; the effects of public sector salaries on the ability and intrinsic motivation of public sector workers; and the differences in intrinsic motivation between public and private sector workers. With regard to the measurement of pro-social behavior, most prior research reviewed has relied on responses to widely-used personality questionnaires (e.g., Dal Bó, Finan and Rossi 2013) or the World Values Survey (e.g., Dur and Zoutenbier 2011 or Smith and Crowley 2011). Fewer studies have used behavioral measures of the intrinsic motivation of public sector workers.

Our tests of the effects of wage levels on intrinsic motivation contribute to a substantial body of research, much of it theoretical, on this issue. Ellingsen and Johannesson (2008) argue that pro-social individuals are more likely to act pro-socially when the mission of the organization to 3 Worldwide Governance Indicators place Indonesia’s control of corruption below the 40th percentile of all countries (Kaufmann, Kraay, Mastruzzi 2009), suggesting a weaker pro-social orientation.