http://repub.eur.nl/res/concept/jel-J4/ Recent publications classified by JEL Code J4 en http://repub.eur.nl/static-eur/img/logo.png http://repub.eur.nl http://repub.eur.nl/res/pub/40359/ 2013-06-05T00:00:00Z The intersection of entrepreneurship research and institutional theory has begun to attract increasing scholarly attention. While much recent research has studied "institutional entrepreneurs" credited with creating new or transforming existing institutions to support their projects, less attention has been paid to the institutions that constitute the menus from which choices are made, and delineate resources for entrepreneurial or other agentic activities. While models of institutionalization frequently break down the process into different categorical stages, how an evolving context affords changing agentic latitude for actors merits more attention. We study the institutionalization of 'temporary work', a new employment practice led by temporary work organizations, a new organizational form in the Netherlands from the 1960s to 2008. Our account suggests an 'ecological' imagery of institutionalization; rather than entrepreneurs' with predetermined agendas shaping and reshaping institutions, we observed distributed institutional entrepreneurship – entrepreneurs seeking change in concert and in conflict with other interdependent actors simultaneously creating, disrupting and maintaining institutions. By examining how an evolving context influences the role of "actor configurations", whose actions, interactions and counteractions can collectively lead to change, but also unintended outcomes, we highlight the non-teleological nature of institutionalization. Finally, our findings suggest that while the legitimacy of a novel practice grows with increasing institutionalization, legitimacy contests may recur and that increasing institutionalization may provide the backdrop for novel practices to emerge. Koene, B.A.S. Ansari, S.M. http://repub.eur.nl/res/pub/38215/ 2012-12-06T00:00:00Z We examine differences in altruism and laziness between public sector employees and private sector employees. Our theoretical model predicts that the likelihood of public sector employment increases with a worker's altruism, and increases or decreases with a worker's laziness depending on his altruism. Using data from the German Socio-Economic Panel Study, we find that public sector employees are significantly more altruistic and lazy than observationally equivalent private sector employees. A series of robustness checks show that these patterns are stronger among higher educated workers; that the sorting of altruistic people to the public sector takes place only within the caring industries; and that the difference in altruism is already present at the start of people's career, while the difference in laziness is only present for employees with sufficiently long work experience. Dur, A.J. Zoutenbier, R. http://repub.eur.nl/res/pub/34712/ 2012-07-20T00:00:00Z We study career choice when competition for promotion is a contest. A more meritocratic profession always succeeds in attracting the highest ability types, whereas a profession with superior promotion benefits attracts high types only if the hazard rate of the noise in performance evaluation is strictly increasing. Raising promotion opportunities produces no systematic effect on the talent distribution, while a higher base wage attracts talent only if total promotion opportunities are sufficiently plentiful Morgan, J. Sisak, D. Vardy, F. http://repub.eur.nl/res/pub/30601/ 2011-11-24T00:00:00Z A rich literature in public administration has shown that public sector employees have stronger altruistic motivations than private sector employees. Recent economic theories stress the importance of mission preferences, and predict that altruistic people sort into the public sector when they subscribe to its mission. This paper uses data from a representative survey among more than 30.000 employees from 50 countries to test this prediction. Our results show that only those individuals who are willing to contribute to the welfare of others and, in addition, feel that by working in the public sector they contribute to a good cause are significantly more likely to work in the public sector. Our results are most pronounced for highly educated employees. Dur, A.J. Zoutenbier, R. http://repub.eur.nl/res/pub/25709/ 2011-07-01T00:00:00Z Recent studies have demonstrated the importance of good management for firm performance. Here, we focus on management in not-for-profits (NFPs). We present a model predicting that management quality will be lower in NFPs compared to for-profits (FPs), but that outputs may not be worse if managers are altruistic. Using a tried and tested survey of management practices, we find that NFPs score lower than FPs but also that, while the relationship between management scores and outputs holds for FPs, the same is not true for NFPs. One implication is that management practices that work for FPs may be less effective in driving performance in NFPs. Delfgaauw, J. Dur, A.J. Propper, C. Smith, S. http://repub.eur.nl/res/pub/32481/ 2011-04-15T00:00:00Z This paper presents evidence from a field experiment designed to evaluate the efficacy of anonymous application procedures. While the policy evaluation itself is of interest, more importantly the experiment provides a unique opportunity to detect race based differential treatment in a controlled market environment. Over a 6 month period we observe all applications sent in response to local public sector vacancies. We observe both the callback and the job oer decision. We compare decisions of recruiters when they can observe ethnic markers (control) with a treatment condition where ethnic markers are absent. We find a substantial differential in the callback decision. Interestingly, we do not find evidence for differential treatment in the job offer decision. A follow up experiment provides indications that recruiters respond strategically to the announcement of the results of the first experiment. Bøg, M. Kranendonk, E. http://repub.eur.nl/res/pub/20324/ 2010-10-01T00:00:00Z The quality of public management is a recurrent concern in many countries. Calls to attract the economy's best and brightest managers to the public sector abound. This paper studies self-selection into managerial positions in the public and private sector, using a model of a perfectly competitive economy where people differ in managerial ability and in public service motivation. We find that, if demand for public sector output is not too high, the equilibrium return to managerial ability is always higher in the private sector. As a result, relatively many of the more able managers self-select into the private sector. Since this outcome is efficient, our analysis implies that attracting a more able managerial workforce to the public sector by increasing remuneration to private-sector levels is not cost-efficient. Delfgaauw, J. Dur, A.J. http://repub.eur.nl/res/pub/26879/ 2010-07-01T00:00:00Z Social interaction with colleagues is an important job attribute for many workers. To attract and retain workers, managers therefore need to think about how to create and preserve high-quality co-worker relationships. This paper develops a principal-multi-agent model where agents do not only engage in productive activities, but also in social interaction with their colleagues, which in turn creates co-worker altruism. We study how financial incentives for productive activities can improve or damage the work climate. We show that both team incentives and relative incentives can help to create a good work climate. Dur, A.J. Sol, J. http://repub.eur.nl/res/pub/17666/ 2010-01-05T00:00:00Z Using a formal principal-agent model, I investigate the relation between monetary gift-exchange and incentive pay, while allowing for worker heterogeneity. I assume that some agents care more for their principal when they are convinced that the principal cares for them. Principals can signal their altruism by offering a generous contract, consisting of a base salary and an output-contingent bonus. I find that principals signal their altruism by offering relatively weak incentives and a relatively high expected total compensation, but the latter does not necessarily hold. Furthermore, since some agents do not reciprocate the principal's altruism, the principal may find it optimal to write a contract that simultaneously signals his altruism and screens reciprocal worker types. I show that such a contract is characterised by excessively strong incentives and relatively high expected total compensation. Non, J.A. http://repub.eur.nl/res/pub/16515/ 2009-07-29T00:00:00Z We assess whether public sector employees have a stronger inclination to serve others and are more risk averse than employees in the private sector. A unique feature of our study is that we use revealed rather than stated preferences data. Respondents of a large-scale survey were offered a substantial reward and could choose between a widely redeemable gift certificate, a lottery ticket, or making a donation to a charity. Our analysis shows that public sector employees are significantly less likely to choose the risky option (lottery) and, at the start of their career, significantly more likely to choose the pro-social option (charity). However, when tenure increases, this difference in pro-social inclinations disappears and, later on, even reverses. Our results further suggest that quite a few public sector employees do not contribute to charity because they feel that they already contribute enough to society at work for too little pay. Buurman, M.W.J.M. Dur, A.J. Bossche, S. van den http://repub.eur.nl/res/pub/18340/ 2009-01-01T00:00:00Z The Dynamics of Job Creation and Job Destruction: Is Sub-Saharan Africa Different? This paper analyzes the creation, destruction and reallocation of jobs in order to understand the micro-dynamics of aggregate employment change in African manufacturing. The nature and magnitude of gross job flows are examined using a unique panel data of Ethiopian manufacturing establishments over the period 1996-2007. We also assess the relative importance of firm demographics, industry effects and business cycles for job flows. The rates and patterns of job creation and destruction in our sample are comparable to the findings from developed and emerging economies suggesting that African firms adjust their labor force in a manner broadly similar to firms elsewhere and that African labor markets are not uniquely restrictive in terms of undermining job reallocation across firms. We also find, as in many other countries, that job reallocation is relatively higher in industries dominated by smaller and younger establishments. However, unlike other regions, job reallocation in our sample is pro-cyclical and its variation across industries bears little similarity to the patterns found in other developed and emerging economies. Small firms in Africa create jobs mainly at the point of market-entry and play a limited role in terms of contributing to manufacturing employment through post-entry expansion. Bedi, A.S. Shiferaw, A. http://repub.eur.nl/res/pub/14054/ 2008-11-17T00:00:00Z Many street-level bureaucrats (such as caseworkers) have the dual task of helping some clients, while sanctioning others. We develop a model of such a street-level bureaucracy and study the implications of its personnel policy on the self-selection and allocation decisions of agents who differ in altruism towards clients. When bureaucrats are paid flat wages, they do not sanction, and the most altruistic types sort into bureaucracy. Pay-for-performance induces some bureaucrats to sanction, but necessitates an increase in expected wage compensation, which can result in sorting from both the top and bottom of the altruism distribution. We also show how client composition affects sorting and why street-level bureaucrats often experience an overload of clients. Buurman, M.W.J.M. Dur, A.J. http://repub.eur.nl/res/pub/14050/ 2008-10-14T00:00:00Z The quality of public management is a recurrent concern in many countries. Calls to attract the economy's best and brightest managers to the public sector abound. This paper studies self-selection into managerial and non-managerial positions in the public and private sector, using a model of a perfectly competitive economy where people differ in managerial ability and in public service motivation. We find that, if demand for public sector output is not too high, the equilibrium return to managerial ability is always highest in the private sector. As a result, relatively many of the more able managers self-select into the private sector. Since this outcome is efficient, our analysis implies that attracting a more able managerial workforce to the public sector by increasing remuneration to private-sector levels is not cost-efficient. Delfgaauw, J. Dur, A.J. http://repub.eur.nl/res/pub/14047/ 2008-09-26T00:00:00Z Social interaction with colleagues is an important job attribute for many workers. To attract and retain workers, managers therefore need to think about how to create and preserve high-quality co-worker relationships. This paper develops a principal-multi-agent model where agents do not only engage in productive activities, but also in social interaction with their colleagues, which in turn creates co-worker altruism. We study how financial incentives for productive activities can improve or damage the work climate. We show that both team incentives and relative incentives can help to create a good work climate. We discuss some empirical evidence supporting these predictions. Dur, A.J. Sol, J. http://repub.eur.nl/res/pub/14043/ 2008-09-03T00:00:00Z We develop a model of manager-employee relationships where employees care more for their manager when they are more convinced that their manager cares for them. Managers can signal their altruistic feelings towards their employees in two ways: by offering a generous wage and by giving attention. Contrary to the traditional gift-exchange hypothesis, we show that altruistic managers may offer lower wages and nevertheless build up better social-exchange relationships with their employees than egoistic managers do. In such equilibria, a low wage signals to employees that the manager has something else to offer -- namely, a lot of attention -- which will induce the employee to stay at the firm and work hard. Our predictions are well in line with some recent empirical findings about gift exchange in the field. Dur, A.J. http://repub.eur.nl/res/pub/10910/ 2008-01-18T00:00:00Z This study documents two empirical regularities, using data for Denmark and Portugal. First, workers who are hired last, are the first to leave the firm (Last In, First Out; LIFO). Second, workers’ wages rise with seniority (= a worker’s tenure relative to the tenure of her colleagues). We seek to explain these regularities by developing a dynamic model of the firm with stochastic product demand and hiring cost (= irreversible specific investments). There is wage bargaining between a worker and its firm. Separations (quits or layoffs) obey the LIFO rule and bargaining is efficient (a zero surplus at the moment of separation). The LIFO rule provides a stronger bargaining position for senior workers, leading to a return to seniority in wages. Efficiency in hiring requires the workers’ bargaining power to be in line with their share in the cost of specific investment. Then, the LIFO rule is a way to protect their property right on the specific investment. We consider the effects of Employment Protection Legislation and risk aversion. Buhai, I.S. Portela, M. Teulings, C.N. Vuuren, A.P. van http://repub.eur.nl/res/pub/8343/ 2006-12-15T00:00:00Z We study the relation between formal incentives and social exchange in organizations where employees work for several managers and reciprocate to a manager's attention with higher effort. To this end we develop a common agency model with two-sided moral hazard. We show that when effort is contractible and attention is not, the first-best can be achieved through bonus pay for both managers and employees. When neither effort nor attention are contractible, an 'attention race' arises, as each manager tries to sway the employee's effort his way. While this may result in too much social exchange, the attention race may also be a blessing because it alleviates managers' moral-hazard problem in attention provision. Lastly, we derive the implications of these contract imperfections for optimal organizational design. Roelfsema, H.J. Dur, A.J. http://repub.eur.nl/res/pub/7092/ 2005-10-21T00:00:00Z Using survey data of public sector employees in the Netherlands, this paper shows that workers' satisfaction with various job domains not only affects whether but also where workers search for another job. An intuitive pattern emerges. Workers try to leave their current employer when their job search is instigated by dissatisfaction with an organisation-specific job domain, like management. Conversely, more job-specific problems, like a lack of autonomy, lead workers to opt for another position within their current organisation. Dissatisfaction with job domains which may have an industry-specific component, such as job duties, drives workers out of their industry. These findings suggest that on-the-job experience provides workers with information about the quality of their own job as well as of other jobs in their organisation and industry. Delfgaauw, J. http://repub.eur.nl/res/pub/6812/ 2005-05-01T00:00:00Z This paper develops a model in which workers to a certain extent like to exert effort at the workplace. We examine the implications of workers' motivation for optimal monetary incentive schemes. We show that in the optimum motivated workers work harder and are willing to work for a lower wage. In addition, we examine whether job seekers have an incentive to be truthful about their motivation in a job interview. When the firm has sufficient bargaining power, workers hide their motivation so as to increase the firm's wage offer. As a result, an inefficient allocation of workers over firms may arise. We show that a commitment to a minimum wage may help to restore allocational efficiency and may be in the interest of the firm. Delfgaauw, J. Dur, A.J. http://repub.eur.nl/res/pub/6593/ 2005-03-01T00:00:00Z This paper employs survey data on the reasons to quit of Dutch job changers who entered or left a public sector job in 2001. We show that workers' reasons to quit their public sector job influence their decision to stay in or leave their industry of employment. A bad experience with, for instance, pay, work pressure, or job duties makes a change in industry more likely. Likewise, many workers who quit out of dissatisfaction with pay or management leave the public sector altogether. Lastly, it is shown that workers' reasons to quit fully explain the differences in wage growth between intra- and interindustry job movers. Delfgaauw, J.