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Performance bonuses in the public sector: Winner-take-all prizes versus proportional payments to reduce child malnutrition in India

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  • Singh, Prakarsh
  • Masters, William A.

Abstract

We conduct a randomized trial to compare incentives for improved child outcomes among salaried caregivers in Chandigarh, India. A contest whose prize is divided among workers in proportion to measured gains yielded more improvement than a winner-take-all program. In our population of about 2000 children served by 85 workers, using proportional rewards led to weight-for-age malnutrition rates that were 4.3 percentage points lower at 3 months (when rewards were paid) and 5.9 points lower at 6 months (after the contest had ended), with mean weight-for-age z scores that were 0.071 higher at 3 months, and 0.095 higher at 6 months. Proportional bonuses led to larger and more sustained gains because of better performance by lower-ranked workers, whose efforts were not rewarded by a winner-take-all prize. Results are consistent with previous laboratory trials and athletic events, demonstrating the value of proportional rewards to improve development outcomes.

Suggested Citation

  • Singh, Prakarsh & Masters, William A., 2020. "Performance bonuses in the public sector: Winner-take-all prizes versus proportional payments to reduce child malnutrition in India," Journal of Development Economics, Elsevier, vol. 146(C).
    • Handle: RePEc:eee:deveco:v:146:y:2020:i:c:s0304387818300610
    DOI: 10.1016/j.jdeveco.2018.10.003
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    Cited by:

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    More about this item

    Keywords

    Contest design; Performance pay; Malnutrition; Underweight; Child development;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • I1 - Health, Education, and Welfare - - Health
    • M5 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics

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