Planned Treatment and Outcomes in Residential Youth Care: Evidence from Sweden

A recurring theme in evaluations of Swedish residential youth care is that treatment is often unplanned. In this paper, I show that planned treatment is strongly positively associated with treatment outcomes. In the short term, teenagers with planned treatment are less likely to experience a treatment breakdown or be reassigned to other forms of residential care after completed treatment. In the long term, teenagers with planned treatment are less likely to engage in criminal behaviour or be hospitalized for mental health problems. The results are robust to controlling for a rich set of potentially confounding factors: Even though observable pre-treatment teenager characteristics explain about one quarter of the variation in criminal behavior 5–10 years after treatment, they have almost no predictive power for whether treatment is planned or unplanned.Residential Youth Care; Juvenile Delinquency; Recidivism; Principal-agent Problems; Bureaucracy

Will Privatization Reduce Costs?

I develop a model of public sector contracting based on the multitask framework by Holmström and Milgrom (1991). In this model, an agent can put effort into increasing the quality of a service or reducing costs. Being residual claimants, private owners have stronger incentives to cut costs than public employees. However, if quality cannot be perfectly measured, providing a private firm with incentives to improve quality forces the owner of the firm to bear risk. As a result, private firms will always be cheaper for low levels of quality but might be more expensive for high levels of quality. Extending the model to allow for differences in task attractiveness, I find that public firms shun unattractive tasks, whereas private firms undertake them if incentives are strong enough.Privatization; public sector contracting; incomplete contracts; contracting out

Will Privatization Reduce Costs?

I develop a model of public sector contracting based on the multitask framework by Holmström and Milgrom (1991). In this model, an agent can put effort into increasing the quality of a service or reducing costs. Being residual claimants, private owners have stronger incentives to cut costs than public employees. However, if quality cannot be perfectly measured, providing a private firm with incentives to improve quality forces the owner of the firm to bear risk. As a result, private firms will always be cheaper for low levels of quality but might be more expensive for high levels of quality. Extending the model to allow for differences in task attractiveness, I find that public firms shun unattractive tasks, whereas private firms undertake them if incentives are strong enough.Privatization; Public Sector Contracting; Incomplete Contracts; Contracting Out

Identity and Redistribution

This paper models the interaction between individuals' identity choices and redistribution. Both redistributive polices and identity choices are endogenous, and there might be multiple equilibria. The model is applied to ethnicity and social class. In an equilibrium with high taxes, the poor identify as poor and favor high taxes. In an equilibrium with low taxes, at least some of the poor identify with their ethnic group and favor low taxes. The model has two main predictions. First, redistribution is highest when society is ethnically homogenous, but the effect of ethnic diversity on redistribution is not necessarily monotonic. Second, when income inequality is low, an increase in income inequality might induce the poor to identify with their ethnic group and therefore favor lower taxes.Redistribution; Social Identity; Income Inequality; Ethnic Fractionalization; Ethnic Diversity; Social Class

Infinity-Harmonic Potentials and Their Streamlines

We consider certain solutions of the Infinity-Laplace Equation in planar convex rings. Their ascending streamlines are unique while the descending ones may bifurcate. We prove that bifurcation occurs in the generic situation and as a consequence, the solutions cannot have Lipschitz continuous gradients.Comment: 21 pages; 1 pictur

Identity and Redistribution

This paper models the interaction between individuals' identity choices and redistribution. Both redistributive policies and identity choices are endogenous, and there might be multiple equilibria. The model is applied to ethnicity and social class. In an equilibrium with high taxes, the poor identify as poor and favor high taxes. In an equilibrium with low taxes, at least some of the poor identify with their ethnic group and favor low taxes. The model has two main predictions. First, redistribution is highest when society is ethnically homogenous, but the effect of ethnic diversity on redistribution is not necessarily monotonic. Second, when income inequality is low, an increase in income inequality might induce the poor to identify with their ethnic group and therefore favor lower taxes.Redistribution; social identity; income inequality; ethnic fractionalization; ethnic diversity; social class