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Pay,Risk,and Productivity.The Case of Finland,1980 -1996

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  • Eva M. Meyersson-Milgrom

    (Department of Sociology, Harvard University, USA and Department of Business Administration, Stockholm University, Sweden)

  • Trond Petersen

    (Walter A. Haas School of Business, University of California Berkeley, USA)

  • Rita Asplund

    (The Research Institute of the Finnish Economy, Finland)

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    Abstract

    This paper reports on four topics. To what extent are piece-rate systems used among manufacturing workers in Finland? What is the effect on the average pay level of using piece- versus time-rate systems? How much wage risk is associated with a piece-rate system? How much of the pay differential between pieceand time-rate workers is compensation for extra effort and how much is compensation for bearing additional risk? Have these relations changed over time? We have access to unique individual-level data on payment systems from several thousand establishments and more than a quarter of a million individuals in the Finnish private sector

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    Bibliographic Info

    Article provided by Finnish Economic Association in its journal Finnish Economic Papers.

    Volume (Year): 15 (2002)
    Issue (Month): 1 (Spring)
    Pages: 3-23

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    Handle: RePEc:fep:journl:v:15:y:2002:i:1:p:3-23

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    Web page: http://www.taloustieteellinenyhdistys.fi
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    1. Daniel Parent, 1997. "Methods of Pay and Earnings: A Longitudinal Analysis," CIRANO Working Papers 97s-14, CIRANO.
    2. Holmstrom, Bengt & Milgrom, Paul, 1987. "Aggregation and Linearity in the Provision of Intertemporal Incentives," Econometrica, Econometric Society, vol. 55(2), pages 303-28, March.
    3. Edward P. Lazear, 1996. "Performance Pay and Productivity," NBER Working Papers 5672, National Bureau of Economic Research, Inc.
    4. Seiler, Eric, 1984. "Piece Rate vs. Time Rate: The Effect of Incentives on Earnings," The Review of Economics and Statistics, MIT Press, vol. 66(3), pages 363-76, August.
    5. Raghuram G. Rajan & Luigi Zingales, 2000. "The Governance of the New Enterprise," NBER Working Papers 7958, National Bureau of Economic Research, Inc.
    6. Asplund, Rita, . "Essays on Human Capital and Earnings inFinland," ETLA A, The Research Institute of the Finnish Economy, number 18.
    7. Petersen, Trond, 1991. "Reward Systems and the Distribution of Wages," Journal of Law, Economics and Organization, Oxford University Press, vol. 7(0), pages 130-58, Special I.
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