Selfish Bakers, Caring Nurses? A Model of Work Motivation
Author(s)
Karine Nyborg and Kjell Arne Brekke
Date of publication
Sep 12, 2007
Abstract
Work contributes to people's self-image in important ways. We
propose a model in which individuals have a preference for being
important to others. This leads to the following predictions:
1) In fully competitive markets with performance pay, behavior
coincides with the standard model (bakers).
2) In jobs where effort is not rewarded according to its social
marginal value, behavior is more socially beneficial than predicted
by the standard model (nurses).
3) Even if unemployment benefits provide full income compensation,
many workers' utility strictly decreases when losing their
job.
4) Similarly, many workers will prefer to work rather than to live
of welfare, even with full income compensation.
5) To keep shirkers out of the public sector, nurses' wages must be
strictly lower than private sector income. At this wage level,
however, the public sector will be too small.
6) It is possible to attract motivated workers to the public
sector, without simultaneously attracting shirkers, through capital
input improving nurses' opportunity to do a good job.