Working Paper: CEPR ID: DP2719
Authors: 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.
Keywords: incentive schemes; privatization; public enterprise
JEL Codes: L32; L33
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| firm type (L20) | incentive intensity (M52) |
| incentive intensity (M52) | labor productivity (J24) |
| firm type (L20) | labor productivity (J24) |
| incentive intensity (M52) | cooperative tasks (P13) |
| cooperative tasks (P13) | labor productivity (J24) |