Wage regulation and the quality of police applicants

Pay structures may not reflect differences in individual productivity and effort; in particular, public pay regulation can distort labour markets. We analyse the impact of nationally regulated pay on the quality of applicants to be police officers across England and Wales, exploiting a unique dataset of individual test scores from the national assessment required of all police applicants, and combining this with data on local labour markets and policing conditions. National wage setting impacts on the quality of police applicants through two channels: first, through spatial variations in the relative wage of policing compared to other occupations, and second, because national wages cannot compensate for local variations in the disamenity of policing. We also provide preliminary evidence on whether police recruit quality is associated with police force performance.