Contracting-Out of Assistance to the Unemployed: Implications of the Australian Experiment
AbstractThe present paper models the behaviour of the unemployed and welfare organisations under contracting. Quality of service is observed by the unemployed, not the government, but quality signals extracted from participation choices allow the socially optimal contract price and program size to be calculated. A political equilibrium program size exists where the median employed voter weighs net taxation cost against the value of assistance should they become unemployed. Programs can be supported even in the absence of risk aversion or altruism. Comparative static responses of program size to various labour market parameters are examined. Copyright 2005 The Economic Society Of Australia.
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Bibliographic InfoArticle provided by The Economic Society of Australia in its journal The Economic Record.
Volume (Year): 81 (2005)
Issue (Month): 252 (03)
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- Richard B. Freeman, 2006.
"Learning from Other Economies: The Unique Institutional and Policy Experiments Down Under,"
The Economic Record,
The Economic Society of Australia, vol. 82(257), pages 195-206, 06.
- Richard B. Freeman, 2006. "Learning from Other Economies: The Unique Institutional and Policy Experiments Down Under," NBER Working Papers 12116, National Bureau of Economic Research, Inc.
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