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Piece Rates, Fixed Wages, and Incentive Effects: Statistical Evidence from Payroll Records

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  • Harry J. Paarsch
  • Bruce Shearer

Abstract

We estimate the gain in productivity that is realized by paying workers piece rates rather than fixed wages; i.e., the incentive effect.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Harry J. Paarsch & Bruce Shearer, 1996. "Piece Rates, Fixed Wages, and Incentive Effects: Statistical Evidence from Payroll Records," CIRANO Working Papers 96s-31, CIRANO.
    • Handle: RePEc:cir:cirwor:96s-31
    as

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    File URL: https://cirano.qc.ca/files/publications/96s-31.pdf
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    References listed on IDEAS

    as
    1. Cheung, Steven N S, 1969. "Transaction Costs, Risk Aversion, and the Choice of Contractual Arrangements," Journal of Law and Economics, University of Chicago Press, vol. 12(1), pages 23-42, April.
    2. Edward P. Lazear, 2000. "Performance Pay and Productivity," American Economic Review, American Economic Association, vol. 90(5), pages 1346-1361, December.
    3. Jones, Derek C & Kato, Takao, 1995. "The Productivity Effects of Employee Stock-Ownership Plans and Bonuses: Evidence from Japanese Panel Data," American Economic Review, American Economic Association, vol. 85(3), pages 391-414, June.
    4. Jean-Jacques Laffont & Mohamed Salah Matoussi, 1995. "Moral Hazard, Financial Constraints and Sharecropping in El Oulja," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 62(3), pages 381-399.
    5. Charles Brown, 1990. "Firms' Choice of Method of Pay," ILR Review, Cornell University, ILR School, vol. 43(3), pages 165-1-182-, April.
    6. Holmstrom, Bengt & Milgrom, Paul, 1987. "Aggregation and Linearity in the Provision of Intertemporal Incentives," Econometrica, Econometric Society, vol. 55(2), pages 303-328, March.
    7. Grossman, Sanford J & Hart, Oliver D, 1983. "An Analysis of the Principal-Agent Problem," Econometrica, Econometric Society, vol. 51(1), pages 7-45, January.
    8. Christopher Ferrall & Bruce Shearer, 1994. "Incentives, Team Production, Transaction Costs and the Optimal Contract: Estimates of an Agency Model using Payroll Records," CIRANO Working Papers 94s-12, CIRANO.
    9. Oliver Hart & Bengt Holmstrom, 1986. "The Theory of Contracts," Working papers 418, Massachusetts Institute of Technology (MIT), Department of Economics.
    10. Lazear, Edward P, 1986. "Salaries and Piece Rates," The Journal of Business, University of Chicago Press, vol. 59(3), pages 405-431, July.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Compensation Systems; Incentive Effect; Principal-Agent Models; Systèmes de compensation; effet incitatif; modèles principal-agent;
    All these keywords.

    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior

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