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Piece rates and workplace injury: Does survey evidence support Adam Smith?

  • Keith Bender
  • Colin Green
  • John Heywood

    ()

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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File URL: http://hdl.handle.net/10.1007/s00148-011-0393-5
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Article provided by Springer in its journal Journal of Population Economics.

Volume (Year): 25 (2012)
Issue (Month): 2 (January)
Pages: 569-590

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Handle: RePEc:spr:jopoec:v:25:y:2012:i:2:p:569-590
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