Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The views expressed in this paper are those of the authors and do not necessarily represent the views or policies of the Board of Governors of the Federal Reserve System or its staff. Terms of use: Documents inWe would like to thank our editor, Daron Acemoglu, and two anonymous referees for their insights. In addition, we received help and comments from the following people: Carliss Baldwin, Peter Cappelli, Sue Helper, David Levine, Mari Rege, Annalee Saxenien, Lowell Taylor, Rob Valletta, participants at seminars at Case Western Reserve University and the National Bureau of Economic Research, staff at the Bureau of Labor Statistics, and Siddhartha Chowdri, Paul Adler, Maura McCarthy, and Jennifer Gregory for research assistance. The usual caveat applies. The Levy Economics Institute Working Paper Collection presents research in progress byLevy Institute scholars and conference participants. The purpose of the series is to disseminate ideas to and elicit comments from academics and professionals.The Levy Economics Institute of Bard College, founded in 1986, is a nonprofit, nonpartisan, independently funded research organization devoted to public service. Through scholarship and economic research it generates viable, effective public policy responses to important economic problems that profoundly affect the quality of life in the United States and abroad.
Economic models of incentives in employment relationships are based on a specific theory of motivation. Employees are "rational cheaters," who anticipate the consequences of their actions and shirk when the perceived marginal benefit exceeds the marginal cost. Managers respond to this decision calculus by implementing monitoring and incentive pay practices that lessen the attraction of shirking. This "rational cheater model" is not the only model of opportunistic behavior, and indeed is viewed skeptically by human resource practitioners and by many non-economists who study employment relationships.We investigate the "rational cheater model" using data from a double-blind field experiment that allows us to observe the effect of experimentally-induced variations in monitoring on employee opportunism. The experiment is unique in that it occurs in the context of an ongoing employment relationship, i.e., with the firm's employees producing output as usual under the supervision of their front-line managers. The results indicate that a significant fraction of employees behave roughly in ccordance with the "rational cheater model." We also find, however, that a substantial proportion of employees do not respond to manipulations in the monitoring rate. This heterogeneity is related to employee assessments about their general treatment by the emp loyer.
One of the most important economic developments in recent years is the growth in the number of temporary and contract employees. Little is known, however, about the implications these contingent employees have for human resource practices. This paper presents the results of a study of one group of contingent workers, contract workers in the petrochemical industry. The primary concern of this study is the consequences contract workers have for safety, a hotly debated and politically charged issue in an industry where safety mishaps can have catastrophic consequences. We find that contract employees offer petrochemical firms an important degree of flexibility in meeting rapid fluctuations in their demand for labor. Contract employment relationships also create stresses with potentially severe adverse effects on workplace safety. Overcoming these threats to safety while maintaining flexibility will require a high level of coordination among human resource professionals, line managers, corporate executives, unions, and government agencies.
T he financing and provision of health care in the United States is distributed across a variety of distinct and often competing entities, each with its own objectives, obligations, and capabilities. These fragmented organizational structures lead to disrupted relationships, poor information flows, and misaligned incentives that combine to degrade the quality of health care in important ways. Many goods and services can be readily financed and provided through a series of unconnected transactions, but in health care, close coordination improves both health outcomes and the efficiency with which good outcomes are achieved.In discussing the effect of organizational fragmentation on the quality of health care, it is helpful to separate the financing of health care from the provision of care. Medical expenditures over a lifetime are often large, lumpy, and uncertain, y Randall Cebul is Professor
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