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Employment, privatization, and managerial choice: Does contracting out reduce public sector employment?
Author(s) -
Fernandez Sergio,
Smith Craig R.,
Wenger Jeffrey B.
Publication year - 2006
Publication title -
journal of policy analysis and management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.898
H-Index - 84
eISSN - 1520-6688
pISSN - 0276-8739
DOI - 10.1002/pam.20227
Subject(s) - public sector , workforce , panel data , public service , labour economics , business , public service motivation , local government , government (linguistics) , public policy , tertiary sector of the economy , sample (material) , new public management , economics , demographic economics , public economics , economic growth , public administration , political science , marketing , linguistics , philosophy , chemistry , economy , chromatography , econometrics
We examine the effects of governments' use of alternative service provision on public employment using panel data from a nationally representative sample of local governments. We model the effects of alternative service provision on the size of the public workforce and hypothesize that alternative provision jointly impacts both full‐ and part‐time employment. We find evidence of an inter‐relationship between these employment types. Our results from seemingly unrelated and 3SLS regressions indicate that full‐time employment in the public sector declines when additional services are provided by for‐profit providers, while part‐time employment increases. The net employment effect in the public sector is negative when government services are moved to the for‐profit sector. These combined effects result in a compositional shift toward more part‐time public sector employment. © 2006 by the Association for Public Policy Analysis and Management