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Performance-Related Pay and Objective Measures of Health after Correcting for Sample Selection

Author

Listed:
  • Andelic, Nicole

    (University of Aberdeen)

  • Allan, Julia

    (University of Stirling)

  • Bender, Keith A.

    (University of Aberdeen)

  • Powell, Daniel

    (University of Aberdeen)

  • Theodossiou, Ioannis

    (University of Aberdeen)

Abstract

Much of the literature on performance-related pay (PRP) and poor health relies on self-reported data, and the relationship is particularly difficult to examine due to confounding variables. To address these limitations we examine three groups of health measures using data from the UKHLS: blood pressure (n=5667), inflammation markers in blood (n=4025) and self-reported health (n=6120). Physiological markers of health allow us to circumvent some of the issues associated with self-reported measures and by using size of firm and % share of PRP workers in occupation we also statistically control for some of the endogeneity associated with self-selection bias. Regressions correcting for self-selection bias and socio-demographic covariates find that PRP contracts are associated with poorer self-reported mental health, higher systolic blood pressure and higher levels of fibrinogen. These findings have implications for firms that use PRP as they may need to implement policies to mitigate against stress.

Suggested Citation

  • Andelic, Nicole & Allan, Julia & Bender, Keith A. & Powell, Daniel & Theodossiou, Ioannis, 2022. "Performance-Related Pay and Objective Measures of Health after Correcting for Sample Selection," IZA Discussion Papers 15000, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp15000
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    References listed on IDEAS

    as
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    Cited by:

    1. Artz, Benjamin & Heywood, John S., 2022. "Performance Pay and Work Hours: US Survey Evidence," IZA Discussion Papers 15412, Institute of Labor Economics (IZA).
    2. Green, Colin P. & Heywood, John S., 2022. "Does Performance Pay Influence Hours of Work?," IZA Discussion Papers 15474, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    performance-related pay; health; sample selection;
    All these keywords.

    JEL classification:

    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
    • I1 - Health, Education, and Welfare - - Health

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