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Privatization and Quality: Evidence from Elderly Care in Sweden

Author

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  • Spagnolo, Giancarlo

    () (Stockholm Institute of Transition Economics)

  • Bergman, Mats A.

    () (Södertörn University)

  • Lundberg, Sofia

    () (Umeå University)

Abstract

Many quality dimensions are hard to contract upon and are at risk of degradation when services are procured rather than produced in-house. However, procurement may foster performance-improving innovation. We assemble a large data set on elderly care services in Sweden between 1990 and 2009, including survival rates - our measure of non-contractible quality - and subjectively perceived quality of service. We estimate how procurement from private providers affects these measures using a difference-in-difference approach. The results indicate that procurement significantly increases non-contractible quality as measured by survival rate, reduces the cost per resident but does not affect subjectively perceived quality.

Suggested Citation

  • Spagnolo, Giancarlo & Bergman, Mats A. & Lundberg, Sofia, 2012. "Privatization and Quality: Evidence from Elderly Care in Sweden," SITE Working Paper Series 19, Stockholm School of Economics, Stockholm Institute of Transition Economics.
  • Handle: RePEc:hhs:hasite:0019
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    Cited by:

    1. Leonardo M. Giuffrida & Gabriele Rovigatti, 2017. "Can the Private Sector Ensure the Public Interest? Evidence from Federal Procurement," CEIS Research Paper 411, Tor Vergata University, CEIS, revised 20 Jul 2017.
    2. Gerdes, Christer, 2015. "Does Performance Information Affect Job Seekers in Selecting Private Providers in Voucher-Based ALMP Programs?," IZA Discussion Papers 8992, Institute for the Study of Labor (IZA).
    3. repec:spr:epolin:v:45:y:2018:i:1:d:10.1007_s40812-017-0085-6 is not listed on IDEAS
    4. Elert, Niklas & Henrekson, Magnus & Stenkula, Mikael, 2017. "Institutional Reform for Innovation and Entrepreneurship: An Agenda for Europe," Working Paper Series 1150, Research Institute of Industrial Economics, revised 16 Feb 2017.

    More about this item

    Keywords

    elderly care; incomplete contracts; limited enforcement; mortality; non-contractible quality; outsourcing; nursing homes; performance measurement; perceived quality; privatization; procurement.;

    JEL classification:

    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out

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