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Pay Spread and Skewness. Employee Effort and Firm Productivity

  • Bingley, P.
  • Eriksson, T

We test predictions from theories of tournament, fairness and tastes for skewness about the effects of pay spread and skewness on employee effort and firm productivity. The data come from the population of 6,501 medium-to-large sized Danish private sector firms matched with all their employees during 1992-95. Potential simultaneity problems are addressed by instrumental variables provided by institutional variation in the income tax system.

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Paper provided by Aarhus School of Business - Department of Economics in its series Papers with number 01-2.

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Length: 25 pages
Date of creation: 2001
Date of revision:
Handle: RePEc:fth:aascbu:01-2
Contact details of provider: Postal:
Department of Economics, Faculty of Business Administration. The Aarhus School of Business. Fuglesangs Alle 4. DK- 8210 Aarhus V - Denmark

Phone: +45 89 486396
Fax: +45 8615 5175
Web page: http://www.asb.dk/about/departments/nat.aspx

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  1. Papke, Leslie E., 1991. "Interstate business tax differentials and new firm location : Evidence from panel data," Journal of Public Economics, Elsevier, vol. 45(1), pages 47-68, June.
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  4. Winter-Ebmer, Rudolf & Zweimuller, Josef, 1999. "Intra-Firm Wage Dispersion and Firm Performance," Kyklos, Wiley Blackwell, vol. 52(4), pages 555-72.
  5. Acemoglu, D. & Pischke, J.S., 1997. "The Structure of Wages and Investment in General Training," Working papers 97-24, Massachusetts Institute of Technology (MIT), Department of Economics.
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  13. Joseph Golec & Maurry Tamarkin, 1998. "Bettors Love Skewness, Not Risk, at the Horse Track," Journal of Political Economy, University of Chicago Press, vol. 106(1), pages 205-225, February.
  14. George A. Akerlof & Janet L. Yellen, 1990. "The Fair Wage-Effort Hypothesis and Unemployment," The Quarterly Journal of Economics, Oxford University Press, vol. 105(2), pages 255-283.
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  18. Milgrom, Paul R., 1987. "employment contracts, influence activities and efficient organization design," Department of Economics, Working Paper Series qt6pf6c5j6, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  19. Holmstrom, Bengt & Milgrom, Paul, 1991. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design," Journal of Law, Economics and Organization, Oxford University Press, vol. 7(0), pages 24-52, Special I.
  20. McCue, Kristin, 1996. "Promotions and Wage Growth," Journal of Labor Economics, University of Chicago Press, vol. 14(2), pages 175-209, April.
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  22. repec:sae:ilrrev:v:43:y:1990:i:3:p:13-29 is not listed on IDEAS
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  31. repec:sae:ilrrev:v:43:y:1990:i:3:p:74-88 is not listed on IDEAS
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  33. Agell, Jonas & Lommerud, Kjell Erik, 1997. "Minimum wages and the incentives for skill formation," Journal of Public Economics, Elsevier, vol. 64(1), pages 25-40, April.
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  37. Lazear, Edward P, 1989. "Pay Equality and Industrial Politics," Journal of Political Economy, University of Chicago Press, vol. 97(3), pages 561-80, June.
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