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Selfish Bakers, Caring Nurses? A Model of Work Motivation

  • Nyborg, Karine

    ()

    (Department of Economics)

  • Brekke, Kjell Arne

    (Department of Economics)

Work contributes to people’s self-image in important ways. We propose a model in which individuals have a preference for being important to others. This leads to the following predictions: 1) In fully competitive markets with performance pay, behavior coincides with the standard model (bakers). 2) In jobs where e¤ort is not rewarded according to its social marginal value, behavior is more socially bene…cial than predicted by the standard model (nurses). 3) Even if unemployment bene…ts provide full income compensation, many workers’ utility strictly decreases when losing their job. 4) Similarly, many workers will prefer to work rather than to live o¤ welfare, even with full income compensation. 5) To keep shirkers out of the public sector, nurses’wages must be strictly lower than private sector income. At this wage level, however, the public sector will be too small. 6) It is possible to attract motivated workers to the public sector, without simultaneously attracting shirkers, through capital input improving nurses’opportunity to do a good job.

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File URL: http://www.hero.uio.no/publicat/2008/2008_1.pdf
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Paper provided by Oslo University, Health Economics Research Programme in its series HERO On line Working Paper Series with number 2008:1.

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Length: 31 pages
Date of creation: 02 Jun 2009
Date of revision:
Handle: RePEc:hhs:oslohe:2008_001
Contact details of provider: Postal: HERO / Institute of Health Management and Health Economics P.O. Box 1089 Blindern, N-0317 Oslo, Norway
Phone: 2307 5309
Fax: 2307 5310
Web page: http://www.hero.uio.no/eng.html
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