Book Review of “At Risk: Social Justice in Child Welfare and Other Human Services” by Karen J. Swift and Marilyn Callahan, 2009, Toronto: University of Toronto Press

The newest book by Canadian social work scholars Karen Swift and Marilyn Callahan is exemplary of how other disciplines can invigorate social work theory. “At Risk” uses child welfare practice as an entry point for exploring the continuing movement away from addressing needs and towards the management of risk in the human services.

Early Versus Late Effort in Dynamic Agencies with Unverifiable Information

In this paper we analyze a dynamic agency problem where contracting parties do not know the agent's future productivity at the beginning of the relationship. We consider a two-period model where both the agent and the principal observe the agent's second-period productivity at the end of the first period. This observation is assumed to be non-verifiable information. We compare long-term contracts with short-term contracts with respect to their suitability to motivate effort in both periods. On the one hand, short-term contracts allow for a better fine-tuning of second-period incentives as they can be aligned with the agent's second-period productivity. On the other hand, in short-term contracts first-period effort incentives might be distorted as contracts have to be sequentially optimal. Hence, the difference between long-term and short-term contracts is characterized by a trade-off between inducing effort in the first and in the second period. We analyze the determinants of this trade-off and demonstrate its implications for performance measurement and information system design.