Do more educated people work for the government?

We investigate the effect of education on public job choice using quarter of birth as an instrumental variable. We find that an additional year of education increases the probability of public sector employment by 1.87 percentage points. However, this positive effect is driven by females, whites, and those with high school degrees or less. For those with college or higher degrees, we observe a decrease in public employment with more education. Our results imply that highly-educated individuals go into high-risk, high-return occupations.