You Have One Job: Political Institutions and Strategic Investments in Human Capital

In recent decades, special districts have come to outnumber general purpose governments in the United States. Yet, little is known about special district workforces and how they compare to general purpose government workforces. Special districts and general purpose governments provide many of the same services (e.g., parks maintenance, drinking water and sewer provision, libraries) and ostensibly have similar workforce needs for similar functions. This study explores how political institutions shape politicians’ preferences for different levels of human capital investment, which in turn shapes overall workforce quality. Leveraging data on water utility operators working at special district and general purpose water utilities in Texas, I investigate differences in human capital investments across two types of political institutions. I find that special districts invest more in human capital than general purpose governments. This study innovatively explores the role of institutions in shaping workforce quality.