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Fixed Wages, Piece Rates, and Intertemporal Productivity: A Study of Tree Planters in British Columbia


  • Harry J. Paarsch
  • Bruce S. Shearer


We examine the effects of different sequences of work and rest on the daily productivity of workers who planted trees in the province of British Columbia, Canada, comparing the intertemporal productivity profiles of planters who were paid either fixed wages or piece rates. We find that planters who are paid piece rates produce more, on average, than those who are paid fixed wages, but that the productivity of piece-rate planters falls with the number of consecutive days worked; the fall in productivity is between three and five percent. Fixed-wage planters, on the other hand, showed no such decreases. Nous considérons les effets de différentes séquences de travail et de repos sur la productivité quotidienne des travailleurs qui s'occupent de plantation d'arbres en Colombie-Britannique. Nous faisons une comparaison des profils intertemporels de la productivité des planteurs qui sont payés à taux fixe avec celle des planteurs qui sont payés à la pièce. Nos résultats suggèrent que les planteurs qui sont payés à la pièce sont plus productifs que ceux qui sont payés un taux fixe. Pourtant, la productivité des planteurs qui sont payés à la pièce diminue avec le nombre de journées consécutives travaillées; la baisse de productivité est entre trois et cinq pour cent par jour. Les travailleurs qui sont payés un taux fixe ne démontrent aucune réduction de productivité.

Suggested Citation

  • Harry J. Paarsch & Bruce S. Shearer, 1997. "Fixed Wages, Piece Rates, and Intertemporal Productivity: A Study of Tree Planters in British Columbia," CIRANO Working Papers 97s-01, CIRANO.
  • Handle: RePEc:cir:cirwor:97s-01

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    References listed on IDEAS

    1. Edward P. Lazear & Paul Oyer, 2012. "Personnel Economics," Introductory Chapters,in: Robert Gibbons & John Roberts (ed.), The Handbook of Organizational Economics Princeton University Press.
    2. Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, vol. 46(1), pages 33-50, January.
    3. Charles Brown, 1992. "Wage Levels and Method of Pay," RAND Journal of Economics, The RAND Corporation, vol. 23(3), pages 366-375, Autumn.
    4. Holmstrom, Bengt & Milgrom, Paul, 1987. "Aggregation and Linearity in the Provision of Intertemporal Incentives," Econometrica, Econometric Society, vol. 55(2), pages 303-328, March.
    5. Edward P. Lazear, 1995. "Personnel Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121883, January.
    6. Lazear, Edward P, 1986. "Salaries and Piece Rates," The Journal of Business, University of Chicago Press, vol. 59(3), pages 405-431, July.
    7. Marcel Boyer, 1997. "Competition and Access in Telecoms: ECPR, Global Price Cap, and Auctions," CIRANO Working Papers 97s-03, CIRANO.
    8. Jean-Jacques Laffont & Mohamed Salah Matoussi, 1995. "Moral Hazard, Financial Constraints and Sharecropping in El Oulja," Review of Economic Studies, Oxford University Press, vol. 62(3), pages 381-399.
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    Cited by:

    1. Lazear, Edward, 2003. "Output-Based Pay: Incentives, Retention or Sorting?," IZA Discussion Papers 761, Institute for the Study of Labor (IZA).
    2. Edward P. Lazear, 2000. "Performance Pay and Productivity," American Economic Review, American Economic Association, vol. 90(5), pages 1346-1361, December.
    3. Bandiera, Oriana & Barankay, Iwan & Rasul, Imran, 2004. "Relative and Absolute Incentives: Evidence on Worker Productivity," CEPR Discussion Papers 4431, C.E.P.R. Discussion Papers.
    4. Edward P. Lazear, 1999. "Output-based Pay: Incentives or Sorting?," NBER Working Papers 7419, National Bureau of Economic Research, Inc.
    5. Oriana Bandiera & Iwan Barankay & Imran Rasul, 2005. "Social Preferences and the Response to Incentives: Evidence from Personnel Data," The Quarterly Journal of Economics, Oxford University Press, vol. 120(3), pages 917-962.

    More about this item


    Compensation Systems; Productivity; Rest; Recuperation; Systèmes de compensation; productivité; repos; récupération;

    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior


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