<mark>Data on civil service jobs were compiled from regulations on base salary and allowances, official earnings data obtained from individual ministries, and interviews with managers regarding actual practice (see Box 1). For private firms and state-owned enterprises, information came from in-person, semi-structured interviews with senior or mid-level managers who had knowledge of prevailing pay rates and often also had hiring authority. The interviews used a written interview guide, adapted from surveys conducted for the World Bank in other countries; questions covered not only earnings, working conditions, and other elements of compensation but also perceptions of the private and public labor markets and flows of workers between them. Some firms provided written earnings records, while others gave verbal estimates of typical earnings (or ranges) by type of job. Although the survey gathered information on payments that are not part of the monthly payroll, such as per diems, bonuses, and overtime, this information was ultimately not included in monthly earnings estimates since the payments were irregular and there was no basis for estimating typical values. Interviews were conducted primarily by one international consultant, with the crucial assistance of one highly skilled interpreter for all of the interviews, who became expert in the specific terminology and line of questioning and was also</mark> able to judge the veracity of the information provided.

<mark>The survey had a number of limitations, many of which are inherent to the jobs approach. Under-reporting of salaries was a risk, particularly for private sector firms; this was partially mitigated by assuring participants that no identifying information would be released nor would salary data be shared with government bodies such as the revenue agency. In a few instances, earnings data had to be excluded because they were not credible or complete enough to allow meaningful analysis. While exclusion of large multinational employers minimized a common bias towards high payers, the comparators included only formal jobs—not informal work (including seasonal agricultural work) or self-employment, which might be likely alternatives for some civil servants. Finally, the convenience sample and the small number of observations precluded statistical analysis so that, as</mark> with the worker analysis, findings were indicative only.

Consistent with experience in other countries, the two approaches to pay comparison yielded differing but complementary perspectives on the competitiveness of public sector earnings vis-à-vis private and other sectors. The findings in the Lao case are presented in the second half of this paper.

# **_Qualitative Research to Understand Incentives_**

Assessments that focus solely on formal, monetary compensation are necessarily incomplete—since civil servants across the globe also enjoy a range of non-regular compensation and other benefits made available through their civil service status. These benefits range from non-regular, duty-related compensation (such as government per diems), to additional income sources (both legal and illegitimate) made possible through civil service status, to non-monetary advantages (such as job tenure, work environment, and social status). Such benefits might even motivate individuals to join and remain in the civil service even when regular compensation itself is relatively low.

In the absence of quantitative data on such issues, a qualitative methodology can be employed to probe the magnitude and impact of these additional incentives related to civil service employment. Such an approach permits an incentives assessment based on emerging evidence that complements the types of analysis of the composition and adequacy of compensation presented above. We used such an approach in Lao PDR (as detailed in Box 4). In doing so, we placed an intentional emphasis on teachers and health workers. It is often the case, as in Lao PDR, that these two cadres comprise a majority of civil servants in developing countries—yet analysis of their compensation and incentives is often complicated for reasons such as separate pay and grading regimes and decentralized human resource management (HRM); and pay comparisons can be impossible if alternative job markets for these individuals do not exist. A qualitative assessment focused on these two cadres can thus reveal information about civil service compensation that would not emerge based on the tools suggested above. The approach can have the added advantage of validating and complementing the findings reached using other analytical tools.

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