Public-private-sector interactions

This set of projects examines aspects of the interplay between the public and private sectors in capital and labour markets. The research addresses risk shifting between the public and private sector in the delivery of public services, and how the behaviour of public and private sector employers in the labour market affects public services performance and the wage distribution. The research will create new academic evidence on these market interactions, and will have implications for policy towards private sector provision of public services and public sector wage setting. 

Risk shifting in public service contracts (Paul Grout)

This project uses stock market and debt rating data to assess the extent of risk shifting between the private and public sector in contracts where private suppliers are engaged directly or indirectly in delivery public services (e.g. PPPs, procurement). The research will use a difference-in-difference approach plus cross section studies of risk profiles of companies.

The impact of pay regulation on children’s learning (Carol Propper)

Areas with higher outside wages are expected to suffer from problems of recruiting, retaining and motivating teachers and this should harm school performance. To test this, this project exploits panel data from the population of English schools where teachers’ pay is centrally set and relatively flat across the country. This project matches in data on outside wages to a national census of schools and children (PLASC) to construct school-level panel data on school performance. We will calculate value-added measures of school performance to control for heterogeneity in school intake. We will also match in data on teacher recruitment and retention from external sources.

Does pay regulation distort technology choice in the NHS? (Carol Propper, Helen Simpson, Mary O’Mahony (Birmingham))

The project examines whether pay regulation in the NHS distorts hospitals’ capital investment decisions, and whether this impacts on productivity. One possibility is that hospitals inefficiently substitute capital for labour if workers are difficult to hire. We will combine new micro-level data on capital investment by hospitals with data on wages, to capture spatial variation in the extent to which labour market regulation bites.

Public sector employers and labour market equilibrium (Fabien Postel-Vinay, Hélène Turon)

Little attention has been paid to the impact of public sector employers on the wage distribution. This project offers to identify and formalize possible economic mechanisms through which public sector employers affect equilibrium wage dispersion and to quantify their effect on wage inequality. This will be achieved by constructing a job search model in which the labour demand side will feature a public employer which has a large relative probability of being sampled by jobseekers. This model will then be calibrated (possibly estimated) and used to analyse various counterfactuals based on different assumptions regarding the objective of the public sector employer.

Business, taxation and welfare (Helen Simpson)

Dr Helen Simpson will be working on the grant Business, taxation and welfare awarded to the University of Oxford by the Economic and Social Research Council (ESRC).This project aims to undertake and disseminate multi- and inter-disciplinary research which will inform government policies in the field of business taxation.