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.