measuring differences in public service motivation between the public and private sector paul a....

 Measuring differences in public service

motivation between the public and private sector

Paul A. Grout

17th November 2006

Centre for Market and Public Organisation

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Two connected pieces of ongoing research on donated labour/public

service motivation(both joint work)

• Quick summary of theoretical model of not-for-profit in a bureaucratic environment

• Evidence on donated labour from British Household Panel Survey

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Not-for-profit in a bureaucratic environment

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Donated labour:• Private sector difficult to supply donated

labour because of residual claimant expropriates the effect of donated labour

• Not-for-profit is able to provide an environment that favours donated labour because of the non-distribution constraint.

• Public sector? – bureaucratic environment

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• Three organisation ‘stories’

Uni. Dept.

NGO

Marketised example

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Parties• Worker

- paid w - chooses e: donated labour (non-contractible)- cares about output

• Outside agent

- makes ‘contribution’ of q to organisation

• Third party• ‘distant’ outsider

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Output and pay-offs

• Output/quality:v(e,(1-t)q,w)

• Worker welfare: v(e,(1-t)q) – c(e) + w

c(e) - convex c’(0) = 0

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• Outside agent

v(e,(1-t)y,w) – k(q) k(q) - convex k’(0) = 0

• [Third party

v(e,(1-t)y,w) – kT(q)]

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Time line

• Worker offered wage

• Worker makes e

• Outside agent offers of q

• Managers accepts or rejects

• If reject wait for non-stochastic arrival of qm

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Single outside agent

• Suppose single outside agent -

then their contribution is qs:

)](),)1(,(max[arg qkwqtevq s

outcome with single outside party S

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Introduce third party

0

)()()( eqr

dteeeqeq mtrtmT

•Introduce third party -

their contribution ‘would be’ qm:

‘outcome‘ with third party T

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Elasticity condition

)(

)(

)(

)(

eq

e

de

edq

eq

e

de

edqs

s

m

m

for all e

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Proposition

If the elasticity condition holds, then there is a unique θ, θ*, such that

• (i)

• (ii)

*),,(*),,( sssTTT weuweu

sT ee

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BHPS evidence

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• Years 1991-2001, 11 waves• Caring sectors defined as working in Education,

Health or Social Services.• 42,831 observations

• Logit analysis of whether doing any unpaid overtime• Controlling for gender, age, marital status, children,

education, wage, normal working hours, part-time, occupation, union or staff association at workplace, tenure, firm size, region & time indicators

• Career concern: we further control for whether the worker has opportunities for promotion.

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pricare pubcare nfpcare noncare

Total

Number of observations 1301 6682 919 32,929

41,831

% 3.11 15.97 2.20 78.72 100

% overtime 42.12 46.42 48.75 49.73 48.94

% paid overtime 24.29 13.42 11.10 31.22 27.17

% unpaid overtime 18.68 33.85 38.63 19.48 22.17

% paid overtime, o>0 55.66 27.08 20.76 60.83 54.70

% unpaid overtime, o>0 42.34 71.08 77.23 37.23 43.37

% both, o>0 2.01 1.84 2.01 1.94 1.92

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Pooled Logit Fixed Effects Logit

Coeff Std err Coeff Std err

N=11833 41828 N=2403 13571

Noncare .207 0.117 0.045 0.179

Pricare - - - -

Pubcare .853 0.123 0.518 0.187

Nfpcare .989 0.159 0.644 0.238

Wage 0.120 0.006 0.088 0.010

Prom opp 0.204 0.039 0.222 0.055

Tenure -0.023 0.004 -0.009 0.007

Union -0.458 0.049 -0.313 0.078

Parttime -1.367 0.100 -1.711 0.141

Kids -0.382 0.051 -0.475 0.087

School -0.415 0.053

No qual -0.904 0.106

Male -0.139 0.052

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Pooled Tobit “FE” Tobit (add means)

Coeff Std err Coeff Std err

Noncare 0.494 0.664 0.358 0.729

Pricare - - - -

Pubcare 4.809 0.704 1.604 0.765

Nfpcare 4.612 0.911 1.663 0.979

Wage 0.700 0.028 0.376 0.039

Prom opp 1.154 0.216 0.716 0.205

Tenure -0.138 0.024 -0.024 0.025

Union -2.545 0.267 -0.803 0.324

Parttime -6.108 0.547 -6.320 0.662

Kids -1.912 0.276 -1.859 0.352

School -2.189 0.297 -1.867 0.305

No qual -4.523 0.565 -4.114 0.572

Male -0.338 0.288 -0.668 0.297

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Preliminary Conclusions

• Empirical evidence supports basic the theoretical literature that donated labour is sensitive to organisational/ownership.

• Suggests not-for-profit may have a role to play in public service delivery

• However, bureaucratic structure may make donated labour ‘delicate’ in this environment.