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Working in Public and Private Firms

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Listed:
  • Giacomo Corneo
  • Rafael Rob

Abstract

We develop a theoretical framework for comparing the style of work in public and private enterprises. We incorporate ‘socializing’, as an activity that yields utility for workers and affects a firm’s output, into a simple multitask model of work organization. In contrast with previous models, 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, labour 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.
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Giacomo Corneo & Rafael Rob, "undated". "Working in Public and Private Firms," Penn CARESS Working Papers 7942b6b570793de0891a05acb, Penn Economics Department.
  • Handle: RePEc:cla:penntw:7942b6b570793de0891a05acb5d61374
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    File URL: http://www.econ.upenn.edu/Centers/CARESS/CARESSpdf/00-19.pdf
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    References listed on IDEAS

    as
    1. repec:hrv:faseco:33077889 is not listed on IDEAS
    2. Alchian, Armen A & Demsetz, Harold, 1972. "Production , Information Costs, and Economic Organization," American Economic Review, American Economic Association, vol. 62(5), pages 777-795, December.
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    4. Boardman, Anthony E & Vining, Aidan R, 1989. "Ownership and Performance in Competitive Environments: A Comparison of the Performance of Private, Mixed, and State-Owned Enterprises," Journal of Law and Economics, University of Chicago Press, vol. 32(1), pages 1-33, April.
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    6. Chamley, C. & Marchand, M. & Pestieau, P., 1989. "Linear incentive schemes to control public firms," European Journal of Political Economy, Elsevier, vol. 5(2-3), pages 229-243.
    7. Itoh, Hideshi, 1991. "Incentives to Help in Multi-agent Situations," Econometrica, Econometric Society, vol. 59(3), pages 611-636, May.
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    9. Roemer, John E. & Silvestre, Joaquim, 1992. "A welfare comparison of private and public monopoly," Journal of Public Economics, Elsevier, vol. 48(1), pages 67-81, June.
    10. De Fraja, Giovanni, 1993. "Productive efficiency in public and private firms," Journal of Public Economics, Elsevier, vol. 50(1), pages 15-30, January.
    11. Holmstrom, Bengt & Milgrom, Paul, 1991. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design," Journal of Law, Economics, and Organization, Oxford University Press, vol. 7(0), pages 24-52, Special I.
    12. Corneo, Giacomo & Rob, Rafael, 2003. "Working in public and private firms," Journal of Public Economics, Elsevier, vol. 87(7-8), pages 1335-1352, August.
    13. Laffont, Jean-Jacques & Tirole, Jean, 1991. "Privatization and Incentives," Journal of Law, Economics, and Organization, Oxford University Press, vol. 7(0), pages 84-105, Special I.
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    18. repec:hrv:faseco:30727607 is not listed on IDEAS
    19. repec:sae:niesru:v:107:y::i:1:p:63-73 is not listed on IDEAS
    20. Weiss, Andrew W, 1980. "Job Queues and Layoffs in Labor Markets with Flexible Wages," Journal of Political Economy, University of Chicago Press, vol. 88(3), pages 526-538, June.
    21. N. Foster & S.G.B. Henry & C. Trinder, 1984. "Public and Private Sector Pay: a Partly Disaggregated Study," National Institute Economic Review, National Institute of Economic and Social Research, vol. 107(1), pages 63-73, February.
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    More about this item

    JEL classification:

    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out

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