This paper presents an empirical analysis of the factors affecting bribe taking by public officials. Factors influencing the acceptance of bribes include: the probability of being convicted, severity of punishment, government salary relative to private sector income, the demonstration effect, and the unemployment rate. Our results indicate that higher probability of being convicted discourages the acceptance of bribes as does more severe punishment. Low relative earnings, high unemployment, and the demonstration effect of aggregate advertising all lead to increased bribe taking.

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provided extremely useful input and guidance. We are grateful to Illinois Department of Employment Security for providing data access. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. At least one co-author has disclosed a financial relationship of potential relevance for this research. Further information is available online at http://www.nber.org/papers/w27576.ack NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

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