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Perceived Income, Promotion and Incentive Effects

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Author Info

  • Epstein, Gil S.

    ()
    (Bar-Ilan University)

  • Ward-Warmedinger, Melanie E.

    ()
    (European Central Bank)

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 Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 435.

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Length: 22 pages
Date of creation: Feb 2002
Date of revision:
Publication status: published in: International Journal of Manpower, 2006, 27 (2), 104-125
Handle: RePEc:iza:izadps:dp435

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Keywords: productivity; underpayment; Perceived income; promotion;

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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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