Abstract
This essay is devoted to investigate ownership-related wage differentials, distinguishing between nonprofit, for-profit and local government organizations, within a sample of US nursing homes. It focuses on within-organization across-occupation wage dispersion. The results do not support widespread opinions about wage dispersion across the three ownership types. Neither the intrinsic motivation perspective’s prediction of less inequality among employees in nonprofit and government sectors, nor the agency theory prediction that higher level employees will use their influence to increase their own well-being without increasing the well-being of others, are supported.
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Notes
- 1.
We develop this argument below, when we discuss agency theory.
- 2.
In Gass’ own words: “Aides do not gain points for doing these tasks [the regulations]; they only lose points for not doing them. We have a schedule to maintain — prescribed routines to follow and tasks to perform and record. All the other stuff, what I would consider our real purpose, is officially just by-product. All the affection, all the consoling, all the filling of emotional holes and the tidying up of frayed feelings are invisible to the owners, to the administration, and to the regulators.” (Gass 2004; p. 114)
- 3.
In nursing homes, this is compounded by the fact that residents are vulnerable adults, who often have decisions made on their behalf by family members who are rarely present in the home to observe the care. The residents themselves may have difficulty communicating their treatment to their family members or to other home employees due to their health problems, deepening the information asymmetry.
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Acknowledgements
We acknowledge support from Aspen Institute Grant NSRF 2005-1, “A Comparative Study of Organizational Structure, Behavior and Performance in For-Profit Firms, Government Organizations, and Nonprofit Organizations”.
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Ben-Ner, A., Ren, T., Paulson, D.F. (2009). A Comparison of Wage Inequality in For-profit, Non-Profit and Local Government Organizations: Nursing Homes in the Midwestern US. In: Musella, M., Destefanis, S. (eds) Paid and Unpaid Labour in the Social Economy. AIEL Series in Labour Economics. Physica, Heidelberg. https://doi.org/10.1007/978-3-7908-2137-6_12
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