Sector Switching in Good Times and in Bad: Are Public Sector Employees Less Likely to Change Sectors?

By Piatak, Jaclyn S. | Public Personnel Management, December 2017 | Go to article overview

Sector Switching in Good Times and in Bad: Are Public Sector Employees Less Likely to Change Sectors?


Piatak, Jaclyn S., Public Personnel Management


Let the public service be a proud and lively career.

--President John F. Kennedy

Introduction

Today's workforce is changing. Employees across all three job sectors--government, nonprofit, and for-profit--are becoming both older and younger, where workplaces now have employees from up-to-five different generations. This creates a diverse pool to recruit employees from and presents new challenges to engage and retain employees with a wide array of needs, motivations, and interests. Meanwhile, in the post-Watergate era, public trust has been on the decline. Compounding issues of public opinion, the United States recently weathered the Great Recession, where governments at the federal, state, and local levels faced pressures to do more with less in light of declining budgets. With limited resources, a declining public image, and a diverse and changing society, how dedicated are public employees?

The professional lives of employees are much more fluid than they have been in the past. The increased mobility of employees is especially relevant to public and nonprofit managers as people carrying out the government's work can now be found across all sectors--government, nonprofit, and for-profit. With the retirement of the baby boomers (still) looming and the growing number of opportunities to serve the public interest in broader ways than working in government, government employees may no longer stay in the government sector for their entire career. Researchers have long examined differences between the government and for-profit sectors (for reviews, see Boyne, 2002; Perry & Rainey, 1988; Rainey, 2014; Rainey, Backoff, & Levine, 1976; Rainey & Bozeman, 2000), but few have explored employees who move from one sector to another.

Research Question 1: Are government and nonprofit employees less likely change job sectors than for-profit employees?

Research Question 2: Does sector-switching behavior vary across levels of government--federal, state, and local?

Research Question 3: In addition, how does sector switching during a stable job market and economy compare with sector switching during times of economic crisis like the Great Recession?

This study addresses these questions and contributes to the public and nonprofit human resource management literature in several ways. First, Bozeman and Ponomariov (2009) posit, "a robust theory of sector switching requires that one examine not only switches from private to public sector but also switches from public to private" (p. 89). This study addresses the gap by examining both moves from the public sector to the for-profit sector as well as from the for-profit sector to the public sector. Second, this analysis goes beyond the government versus for-profit distinction to examine differences in sector switching between nonprofit employees and for-profit employees in addition to government employees. Third, this study examines potential differences within the government sector, across federal, state, and local government employees. Fourth, public administration literature emphasizes the public service ethos that draws individuals to such work, but little attention has been paid to how the economic conditions shape individuals' decisions to join or to stay in the public service sector. This study examines how the job market conditions influence the job sectors by examining patterns of sector switching during both stable and turbulent economic times.

This study uses hazard models to predict the probability of government--federal, state, and local--and nonprofit employees moving to the for-profit sector compared with for-profit sector employees moving to the public sector. This study examines sector-switching behaviors over time in two panels, one during "normal" economic conditions and one during the Great Recession. Findings shed light on sector switching and the impact of tough labor market conditions on employment decisions. …

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