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Piece Rates and Workplace Injury: Does Survey Evidence Support Adam Smith?

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  • K A Bender
  • C Green
  • J S 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

Paper provided by Lancaster University Management School, Economics Department in its series Working Papers with number 609288.

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Date of creation: 2010
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Handle: RePEc:lan:wpaper:609288

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Cited by:
  1. Alex Bryson & Petri Böckerman & Pekka Ilmakunnas, 2011. "Does High Involvement Management Improve Worker Wellbeing?," CEP Discussion Papers dp1095, Centre for Economic Performance, LSE.
  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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