Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/333634 
Year of Publication: 
2025
Series/Report no.: 
IZA Discussion Papers No. 18195
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
Using household survey data on expenditures and incomes, we construct an objective measure of corruption in the public sector for a broad spectrum of countries. Specifically, we focus on the consumption-income gap for public sector workers relative to private sector workers to gauge the extent of hidden income (bribes) in the government. After validating our data and documenting properties of the consumption-income gap, we compare our measure with popular corruption perception indices. We find that i) the relationship between our measure and the alternatives is nonlinear; ii) available indices appear to be only weakly (and sometimes "wrongly") correlated with the consumption-income gap at high frequencies; iii) the available indices appear to have a low weight on the relative consumption-income gap in the public sector.
Subjects: 
corruption
bribery
public sector
consumption
wage premium
JEL: 
D73
H1
J3
J4
O1
P2
Document Type: 
Working Paper

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