Working in Public and Private Firms
25 Pages Posted: 14 Oct 2002
There are 2 versions of this paper
Working in Public and Private Firms
Date Written: October 30, 2001
Abstract
We develop a theoretical framework for comparing incentives, labor productivity and the allocation of effort in public versus private enterprises. We incorporate "socializing", an activity which yields utility for workers and affects a firm's output, into a multitask model of work organization. We establish the two following results. First, the optimal workers' compensation policy displays a larger incentive intensity in the private firm than in the public firm. Second, labor productivity in the private firm may be higher or lower than in the public firm. Both results fit well with the findings of empirical work.
Keywords: Public Enterprise, Privatization, Incentive Schemes
JEL Classification: L32, L33
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Beauty is a Beast, Frog is a Prince: Assortative Matching with Nontransferabilities
By Patrick Legros and Andrew F. Newman
-
Incentives in Markets, Firms and Governments
By Daron Acemoglu, Michael Kremer, ...
-
Signaling and Screening of Workers' Motivation
By Josse Delfgaauw and Robert Dur
-
Incentives and Workers' Motivation in the Public Sector
By Josse Delfgaauw and Robert Dur
-
Incentives and Workers' Motivation in the Public Sector
By Josse Delfgaauw and Robert Dur