Speaker: Senay Solak (Isenberg School of Management, UMass Amherst)
Title: ” Service-Focused Social Welfare Programs: Vouchers or Contracted Slots?”
Date: 28th February 2025
Time: 13:30
Place: EA409
Abstract:
We study operational decision-making by governments and profit-oriented service providers under two widely used service-focused subsidy welfare programs: vouchers and contracted slots. In voucher programs, beneficiaries redeem vouchers at any participating private provider, but providers are only obligated to serve them if capacity remains after accommodating full-price-paying customers in the private market. In contrast, contracted slot programs involve governments partnering with high-quality providers who commit to reserving a fixed number of slots for beneficiaries.
We provide an operational lens to evaluate these program types, addressing the ongoing policy discourse surrounding their efficacy. We explore how subsidy program design, provider characteristics, and market dynamics influence the availability and quality of essential services delivered by service providers. By comparing equilibrium outcomes under the two program types, we identify conditions under which the government might favor vouchers or contracted slots, considering the total societal impact and the expected profits of for-profit providers. Our findings provide guidance for policymakers in designing operations-focused subsidy programs that improve societal outcomes while aligning with private-sector incentives.
Bio:
Dr. Senay Solak is the John F. Smith Memorial Professor and Department Chair in the Operations and Information Management Department of Isenberg School of Management at University of Massachusetts Amherst. He holds Ph.D. and M.S. degrees in Industrial Engineering and Operations Research from Georgia Institute of Technology, and a B.S. degree in Electrical Engineering from the U.S. Naval Academy. His research focuses on socially and environmentally sustainable operations, with applications in the nonprofit, healthcare, energy, and transportation sectors. Dr. Solak’s research has been funded by NSF, NASA, FAA, and other industry organizations, and his work has appeared in various top-tier journals. His honors include several Best Paper Awards; College Outstanding Researcher and Research Excellence Awards at University of Massachusetts Amherst; Georgia Tech Supply Chain&Logistics Institute Global Logistics Scholar Award; and the U.S. Naval Academy Distinctive Graduate Award.