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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.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3217.

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Date of creation: Feb 2002
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Handle: RePEc:cpr:ceprdp:3217

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Keywords: perceived income; productivity; promotion; underpayment;

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  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," IZA Discussion Papers 445, Institute for the Study of Labor (IZA).

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