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Perceived Income, Promotion and Incentives Effects

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  • Epstein, Gil S
  • Ward-Warmedinger, Melanie

Abstract

This Paper examines the disincentive effects of perceived underpayment on individuals? exerted effort and promotion. To this end we develop a theoretical framework and obtain empirical evidence by analysing British academia data. We find that, tenured academics will tend to invest less effort in publishing as the difference between their perceived deserved income and actual income increases. On the other hand, for non-tenured academics this relationship is ambiguous. Our model predicts that if, however, tenured staff also derive utility directly from publication, over and above that associated with income and promotion, the difference between perceived and actual income has a smaller negative effect on the actual effort invested in research.

Suggested Citation

  • Epstein, Gil S & Ward-Warmedinger, Melanie, 2002. "Perceived Income, Promotion and Incentives Effects," CEPR Discussion Papers 3217, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:3217
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    References listed on IDEAS

    as
    1. Epstein, Gil S. & Spiegel, Uriel, 2001. "Natural inequality, production and economic growth," Labour Economics, Elsevier, vol. 8(4), pages 463-473, September.
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    Cited by:

    1. Epstein, Gil S, 2002. "Informational Cascades and Decision to Migrate," CEPR Discussion Papers 3287, C.E.P.R. Discussion Papers.

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    More about this item

    Keywords

    Perceived income; Underpayment; Productivity; Promotion;
    All these keywords.

    JEL classification:

    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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