Working in public and private firms

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 e...

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Bibliographic Details
Published inJournal of public economics Vol. 87; no. 7; pp. 1335 - 1352
Main Authors Corneo, Giacomo, Rob, Rafael
Format Journal Article
LanguageEnglish
Published Elsevier B.V 01.08.2003
Elsevier
SeriesJournal of Public Economics
Subjects
Bonuses
Compensation
Economics
Incentive schemes
Labour productivity
Privatization
Public economics
Public enterprise
Public enterprises
Workers
L32
Privatization
Public enterprise
L33
Incentive schemes
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Summary: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.
Bibliography:ObjectType-Article-2
SourceType-Scholarly Journals-1
ObjectType-Feature-1
content type line 23
ISSN:0047-2727
1879-2316
DOI:10.1016/S0047-2727(01)00199-2