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Public–private political cleavage: what happens after retirement?

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Abstract

Political preferences of public employees differ from those of workers in the private sector. The former are more likely to vote for left-wing parties and orient themselves ideologically towards the left. This political cleavage can be understood as the result of occupational incentives, or alternatively, as ideological self-selection whereby individuals favoring government solutions seek employment in the public sector. We test the selection hypothesis by estimating the effects of public versus private occupational sector on political preferences before and after retirement. The data are from the Norwegian Election Surveys and cover nine national elections between 1977 and 2009. The research design addresses a series of cross-sectional data and the key challenge of endogenous retirement is handled with instrumental variables. Party choice, ideological orientation, and public spending preferences are shown to change following retirement, and former private and public employees converge. The results reject selection based on ‘hard-wired’ political preferences.

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Notes

  1. In Norway, this sectoral division of party preferences has been shown to be important and is understood in the context of the welfare state (Bjørklund 1999, p. 293).

  2. More recent studies find support for the hypothesis that a desire to serve the public is one reason why young people want a government job. For example, Cowley (2013) apply the world values survey and find that public sector workers frequently have higher intrinsic motivation compared to workers in the private sector. Dur and Zoutenbier (2013) employ a German, individual-level survey panel dataset. They observe that public sector employees are more altruistic than are employees in the private sector at the start of their careers, and the differences persist as long as they are working.

  3. The data used in the analysis are from the Norwegian Election Studies 1965–2009. Data are anonymized and sourced from Norwegian Social Data Services (NSD). The Norwegian Institute of Social Research (ISF) was responsible for the original study, and Statistics Norway (SSB) collected the data. Neither ISF, SSB, nor NSD are responsible for the analyses or interpretations presented here.

  4. See http://nsddata.nsd.uib.no/webview/index/no/Individdata/Valgundersoekelser.d.30/Valgundersoekelsene-tidsserie-2001-2009/fStudy/NSD1760-2.

  5. In Norwegian:”Betrakter du deg hovedsakelig som 1) yrkesaktiv, 2) student eller skoleelev, 3) alderspensjonist, førtidspensjonist eller uførepensjonist, 4) hjemmearbeidende, 5) arbeidsledig, 6) vernepliktig, 7) annet, 8) vil ikke svare, 9) vet ikke.”

  6. In Norwegian: Hvis yrkesaktiv: “De følgende spørsmålene gjelder ditt hovedyrke. Er den virksomheten du arbeider i, et personlig eid firma, et aksjeselskap, en organisasjon, kommunal, fylkeskommunal eller statlig virksomhet?” Hvis tidligere yrkesaktiv: “Var den virksomheten du arbeidet i, et personlig eid firma, et aksjeselskap, en organisasjon, kommunal, fylkeskommunal eller statlig virksomhet?”

  7. The intercept α 0 represents a female retiree who formerly worked in the public sector. She has compulsory education only and no spouse; and it represents the preferences of the oldest group observed in the last election (2009).

  8. This ‘political gender gap,’ it has been suggested, is also explained by higher divorce rates, leading to a reduction in women’s relative incomes (Edlund and Pande 2002).

  9. Everyone who has lived in Norway for at least 40 years after the age of 16 is entitled to a retirement pension from 67 years of age. With no taxable income, the pension will be at a minimum level. New rules for retirement pensions were introduced from January 2011. These rules do not impinge on the current analysis.

  10. In the public sector, some occupations have lower age limits. The major groups are nurses/auxiliary nurses (65 years of age), police and firemen (62 years of age) and military personnel (60 years of age). The Election Surveys have a detailed coding of occupation. The first-stage results regression results rely on retirement age limits and age limits of 67 and 70 years only. These results were not sensitive to including the occupation-specific age limits.

  11. The Election Surveys do not include information that allows us to identify whether the private-sector respondents worked in a company that were part of the early retirement program.

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Acknowledgments

We appreciate comments at the December 2012 BI workshop on political economy, the 2014 EPSA meeting in Edinburgh, the 2015 European Public Choice meeting in Groningen, and staff seminar at the Department of Political Science, University of Oslo, in particular Michael Becher, Aziz Berdiev, Jon Fiva, Olle Folke, Oddbjørn Knutsen, Martin Paldam, two referees, and the editor.

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Authors and Affiliations

  1. Department of Economics, Norwegian University of Science and Technology, Dragvoll University Campus, 7491, Trondheim, Norway

    Jørn Rattsø

  2. Department of Economics, BI Norwegian Business School, Nydalsveien 37, 0484, Oslo, Norway

    Rune J. Sørensen

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  1. Jørn Rattsø
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  2. Rune J. Sørensen
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Correspondence to Jørn Rattsø.

Appendix

Appendix

See Tables 6–8.

Table 6 OLS estimates with complete estimates for covariates, c.f. Tables 2, 3, 4, 5
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Table 7 The impact of retirement on political interest
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Table 8 First-stage regression results, c.f. Table 5
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Rattsø, J., Sørensen, R.J. Public–private political cleavage: what happens after retirement?. Public Choice 166, 315–333 (2016). https://doi.org/10.1007/s11127-016-0324-9

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