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Piece rates and workplace injury: Does survey evidence support Adam Smith?

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  • Keith Bender
  • Colin Green
  • John Heywood

    ()

Abstract

While piece rates are routinely associated with greater productivity and higher wages, they may also generate unanticipated effects. This paper uses cross-country European data to provide among the first broad survey evidence of a strong link between piece rates and workplace injury. Despite unusually good controls for workplace hazards, job characteristics and worker effort, workers on piece rates suffer a large 5 percentage point greater likelihood of injury. As injury rates are typically not controlled for when estimating the premium to piece rates, this raises the specter that a portion of the return to piece rates reflects a compensating wage differential for risk of injury.

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Bibliographic Info

Article provided by Springer in its journal Journal of Population Economics.

Volume (Year): 25 (2012)
Issue (Month): 2 (January)
Pages: 569-590

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Handle: RePEc:spr:jopoec:v:25:y:2012:i:2:p:569-590

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Related research

Keywords: Piece rate; Injury; Incentives; J33; J28;

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References

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Cited by:
  1. Böckerman, Petri & Bryson, Alex & Ilmakunnas, Pekka, 2012. "Does high involvement management improve worker wellbeing?," Journal of Economic Behavior & Organization, Elsevier, vol. 84(2), pages 660-680.
  2. Pouliakas, Konstantinos & Theodoropoulos, Nikolaos, 2011. "The Effect of Variable Pay Schemes on Workplace Absenteeism," IZA Discussion Papers 5941, Institute for the Study of Labor (IZA).

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