Principal-Agent Relation and Contracting-out for Employment Case Management to Enable Third-Country Nationals’ Transition to Work

This paper analyzes the role of public and private employment-service agencies in contracting-out for employment case management under principal-agency relation to understand young third-country immigrants’ transition to work in Czechia, Poland, and Hungary. Existing research pointed to contracting-out as a major trend in public-service reforms when the government (principal) hires private employment agencies (agents) to perform service delivery, but overall the control of standards and the accountability to the public remains with the authority. Although the principal-agency relation shows human beings as rational and opportunist in corporate governance, there is still little research in CEE countries explaining the role of public and private employment agencies under principal-agency relation in contracting-out for case management to understand young third-country immigrants’ transition to work. Based on a qualitative cross-national case-oriented research approach with fewer-country comparison, documents and scholastic texts are collected and analyzed by means of a document and content analysis technique to fill in this gap. The findings show that open information, regulation, and monitoring administrative devices are a major perceived influence in principal-agency relational governance with a lack of cooperation that may impair the quality and service when looking at issues such as employment-related transition of young third-country immigrants and socio-economically disadvantaged groups in a contracting-out setting. The study demonstrated certain decentralized new public administration governance similarities but dissimilarities from the country’s institutional context. The outcome points to regulatory administrative devices to target agencies’ behavior and young vulnerable people’s need for paid work. This is relevant to performance monitoring in contemporary fluid society targeting benefits and scarce resources that may not only constrain ethnic minorities’ upward mobility, but the economy and the social cohesion process.