Labour Market Information Acquisition and Downsizing
We study the optimal mechanism for downsizing the public sector which takes into account different informational constraints (complete versus asymmetric information on each workerís efficiency) and political constraints (mandatory versus voluntary downsizing). Under complete information, the optimal structure of downsizing (who is laid-off and who is not) does not depend on the political constraint and is determined by the (marginal) cost of retaining a worker in the public sector. Since this cost includes his opportunity cost in the private sector, information acquisition on opportunity costs affects the structure of downsizing. Under asymmetric information, the political constraints determine which workers obtain information rents and therefore affect the structure of downsizing. An increase in the precision of the information on workers' opportunity costs may increase or decrease social welfare depending on its impacts on the information rents.
|Date of creation:||Sep 2003|
|Date of revision:|
|Contact details of provider:|| Postal: Ramon Trias Fargas, 25-27, 08005 Barcelona|
Phone: +34 93 542-1222
Fax: +34 93 542-1223
Web page: http://www.barcelonagse.eu
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- M. Dewatripont & G. Roland, 1992. "Economic Reform and Dynamic Political Constraints," Review of Economic Studies, Oxford University Press, vol. 59(4), pages 703-730.
- Antonio Estache & Jean-Jacques Laffont & Xinzhu Zhang, 2004.
"Downsizing with labor sharing and collusion,"
ULB Institutional Repository
2013/43976, ULB -- Universite Libre de Bruxelles.
- Antonio Estache & Jean-Jacques Laffont & Xinzhu Zhang, 2004. "Downsizing with labor sharing and collusion?," ULB Institutional Repository 2013/13374, ULB -- Universite Libre de Bruxelles.
- Antonio Estache & Jean-Jacques Laffont & Xinzhu Zhang, 2002. "Downsizing with Labor Sharing and Collusion," ULB Institutional Repository 2013/43996, ULB -- Universite Libre de Bruxelles.
- Laffont, Jean-Jacques & Estache, Antonio & Zhang, Xinshu, 2003. "Downsizing with Labor Sharing and Collusion," IDEI Working Papers 174, Institut d'Économie Industrielle (IDEI), Toulouse.
- Alberto Chong & Florencio Lopez-de-Silanes, 2003.
"Privatization and Labor Force Restructuring Around the World,"
Research Department Publications
4329, Inter-American Development Bank, Research Department.
- Chong, Alberto & Lopez-de-Silanes, Florencio, 2002. "Privatization and labor force restructuring around the world," Policy Research Working Paper Series 2884, The World Bank.
- Alberto E. Chong & Florencio López-de-Silanes, 2003. "Privatization and Labor Force Restructuring around the World," IDB Publications (Working Papers) 6507, Inter-American Development Bank.
- Alderman, Harold & Canagarajah, Sudharshan & Younger, Stephen, 1995. "A Comparison of Ghanaian Civil Servants' Earnings before and after Retrenchment," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 4(2), pages 259-88, October.
- Mathias Dewatripont, 1992. "Economic Reform and Dynamic Political Constraints," ULB Institutional Repository 2013/175991, ULB -- Universite Libre de Bruxelles.
When requesting a correction, please mention this item's handle: RePEc:bge:wpaper:43. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bruno Guallar)
If references are entirely missing, you can add them using this form.