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on Contract Theory and Applications |
| By: | Decarolis, Francesco; Giuffrida, Leonardo; Iossa, Elisabetta; Mollisi, Vincenzo; Spagnolo, Giancarlo |
| Abstract: | To what extent does a more competent public bureaucracy contribute to better economic outcomes? We address this question in the context of the US federal procurement of services and works, by combining contract-level data on procurement performance and bureau-level data on competence and workforce characteristics. We use the death occurrences of specific types of employees as instruments and find that an increase in bureau competence causes a significant and economically important reduction in: i) time delays, ii) cost overruns, and iii) number of renegotiations. Cooperation within the office appears to be a key driver of the findings. |
| Keywords: | buyer quality,competence,procurement,public management,state capacity |
| JEL: | D44 H11 H57 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:19057&r=all |
| By: | Paul Schumann; Lars Kuchinke |
| Abstract: | This paper examines the impact of fixed-term employment on the affective and cognitive well-being of employees operationalized by the subjective frequency of the basic emotions of happiness, sadness, fear and anger as well as life satisfaction. Longitudinal effects were analysed across 10 waves of sampling from the Socio-Economic Panel (SOEP), an annual representative survey in Germany. Random effects within between model (REWB) analyses were applied to examine differences between fixed-term and permanent workers as well as within effects of a change of contract type. In addition, the impact of the direction of contract type change was evaluated by examining subsamples with changes from fixed-term to permanent and vice versa. The results suggest that fixed-term employees’ affective well-being is lower, while cognitive well-being (or happiness) is hardly affected. A change from permanent to fixed-term contracts is associated with higher frequencies of self-reported fear and sadness experiences, while a change in the opposite direction results in lower frequencies. In addition, life satisfaction was only found to increase with the change from fixed-term to permanent employment. While the effect on fear is masked by job security, acting as a mediating factor, the effect on sadness remains significant when the model is controlled for job security. Thus, by treating cognitive and affective well-being as separate constructs this study provides new insights into the psychological costs of fixed-term contracts and reveals the strong impact of fixed-term employment on self-reported experiences of sadness. |
| Keywords: | fixed-term employment, affective well-being, job security, job change, cognitive well-being, life satisfaction, hybrid models |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp1065&r=all |
| By: | Marco Pagano (Università di Napoli Federico II, CSEF, EEIF, CEPR and ECGI) |
| Abstract: | Labor income risk is key to the welfare of most people. This paper starts by asking why this risk is mainly insured “within the firm” and not by financial markets, and what restricts the extent of such risk sharing. It identifies four main constraining factors: public unemployment insurance, moral hazard on the workers’ side, limited commitment by firms, and workers’ wage bargaining power. These factors explain three empirical regularities: (i) family firms provide more employment insurance than nonfamily firms; (ii) the former pay lower real wages, and (iii) firms provide less employment insurance where public unemployment benefits are more generous. The paper also explores the connection between risk sharing and firms’ capital structure: highly leveraged firms have more unstable employment, so that greater leverage calls for high wages to compensate employees for job risk; nevertheless, firms may want to lever up strategically in order to offset the bargaining power of labor unions. Hence, the distributional conflict between shareholders and workers may limit risk sharing within the firm. By contrast, bondholders and workers are not necessarily in conflict, as both are harmed by firms’ risk-taking. Finally, firms may also insure employees against the risk due to uncertainty about their own talent, but their capacity to do so is constrained by the fact that, in the presence of labor market competition, talented employees require high wages, making uncertainty about talent uninsurable. Lastly, the paper offers evidence that risk sharing within firms has declined steadily in recent decades and discusses possible explanations. |
| Keywords: | risk sharing, insurance, unemployment, social security, wage, implicit labor contracts, family firms. |
| JEL: | D21 D22 D80 G32 G39 H55 J63 J65 M51 M52 |
| Date: | 2019–12–19 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:553&r=all |